We Think You Can Look Beyond Xiamen Comfort Science&Technology Group's (SZSE:002614) Lackluster Earnings

Soft earnings didn't appear to concern Xiamen Comfort Science&Technology Group Co., Ltd's (SZSE:002614) shareholders over the last week. We did some digging, and we believe the earnings are stronger than they seem.

View our latest analysis for Xiamen Comfort Science&Technology Group

The Impact Of Unusual Items On Profit

For anyone who wants to understand Xiamen Comfort Science&Technology Group's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by CN¥80m due to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. In the twelve months to March 2024, Xiamen Comfort Science&Technology Group had a big unusual items expense. As a result, we can surmise that the unusual items made its statutory profit significantly weaker than it would otherwise be.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Xiamen Comfort Science&Technology Group's Profit Performance

As we mentioned previously, the Xiamen Comfort Science&Technology Group's profit was hampered by unusual items in the last year. Because of this, we think Xiamen Comfort Science&Technology Group's underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. While conducting our analysis, we found that Xiamen Comfort Science&Technology Group has 2 warning signs and it would be unwise to ignore these.

Today we've zoomed in on a single data point to better understand the nature of Xiamen Comfort Science&Technology Group's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying to be useful.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.