Solid Earnings May Not Tell The Whole Story For Ningbo Jintian Copper (Group) (SHSE:601609)

The recent earnings posted by Ningbo Jintian Copper (Group) Co., Ltd. (SHSE:601609) were solid, but the stock didn't move as much as we expected. However the statutory profit number doesn't tell the whole story, and we have found some factors which might be of concern to shareholders.

View our latest analysis for Ningbo Jintian Copper (Group)

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Ningbo Jintian Copper (Group)'s profit received a boost of CN¥95m in unusual items, over the last year. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And, after all, that's exactly what the accounting terminology implies. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is).

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 Ningbo Jintian Copper (Group)'s Profit Performance

Arguably, Ningbo Jintian Copper (Group)'s statutory earnings have been distorted by unusual items boosting profit. Because of this, we think that it may be that Ningbo Jintian Copper (Group)'s statutory profits are better than its underlying earnings power. The good news is that, its earnings per share increased by 7.2% in 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. If you'd like to know more about Ningbo Jintian Copper (Group) as a business, it's important to be aware of any risks it's facing. For instance, we've identified 3 warning signs for Ningbo Jintian Copper (Group) (1 is a bit unpleasant) you should be familiar with.

Today we've zoomed in on a single data point to better understand the nature of Ningbo Jintian Copper (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 with significant insider holdings 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.