Stock Analysis

There May Be Reason For Hope In Baoshan Iron & Steel's (SHSE:600019) Disappointing Earnings

SHSE:600019
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Soft earnings didn't appear to concern Baoshan Iron & Steel Co., Ltd.'s (SHSE:600019) shareholders over the last week. We think that the softer headline numbers might be getting counterbalanced by some positive underlying factors.

See our latest analysis for Baoshan Iron & Steel

earnings-and-revenue-history
SHSE:600019 Earnings and Revenue History November 5th 2024

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Baoshan Iron & Steel's profit was reduced by CN¥1.6b, due to unusual items, over the last year. 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. Assuming those unusual expenses don't come up again, we'd therefore expect Baoshan Iron & Steel to produce a higher profit next year, all else being equal.

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 Baoshan Iron & Steel's Profit Performance

Because unusual items detracted from Baoshan Iron & Steel's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Baoshan Iron & Steel's earnings potential is at least as good as it seems, and maybe even better! Unfortunately, though, its earnings per share actually fell back over the last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 1 warning sign for Baoshan Iron & Steel you should be aware of.

This note has only looked at a single factor that sheds light on the nature of Baoshan Iron & Steel's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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 with high insider ownership.

Valuation is complex, but we're here to simplify it.

Discover if Baoshan Iron & Steel might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.

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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.