Stock Analysis

Jiangsu Yuyue Medical Equipment & Supply's (SZSE:002223) Profits May Not Reveal Underlying Issues

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Jiangsu Yuyue Medical Equipment & Supply Co., Ltd. (SZSE:002223) just released a solid earnings report, and the stock displayed some strength. While the profit numbers were good, our analysis has found some concerning factors that shareholders should be aware of.

See our latest analysis for Jiangsu Yuyue Medical Equipment & Supply

SZSE:002223 Earnings and Revenue History May 3rd 2024

How Do Unusual Items Influence Profit?

To properly understand Jiangsu Yuyue Medical Equipment & Supply's profit results, we need to consider the CN¥530m gain attributed to unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And, after all, that's exactly what the accounting terminology implies. We can see that Jiangsu Yuyue Medical Equipment & Supply's positive unusual items were quite significant relative to its profit in the year to March 2024. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger 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 Jiangsu Yuyue Medical Equipment & Supply's Profit Performance

As previously mentioned, Jiangsu Yuyue Medical Equipment & Supply's large boost from unusual items won't be there indefinitely, so its statutory earnings are probably a poor guide to its underlying profitability. As a result, we think it may well be the case that Jiangsu Yuyue Medical Equipment & Supply's underlying earnings power is lower than its statutory profit. But at least holders can take some solace from the 29% per annum growth in EPS for the last three. 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. At Simply Wall St, we found 2 warning signs for Jiangsu Yuyue Medical Equipment & Supply and we think they deserve your attention.

Today we've zoomed in on a single data point to better understand the nature of Jiangsu Yuyue Medical Equipment & Supply's profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

Valuation is complex, but we're helping make it simple.

Find out whether Jiangsu Yuyue Medical Equipment & Supply is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.