There May Be Some Bright Spots In Zhejiang Wansheng's (SHSE:603010) Earnings

Shareholders appeared unconcerned with Zhejiang Wansheng Co., Ltd.'s (SHSE:603010) lackluster earnings report last week. We did some digging, and we believe the earnings are stronger than they seem.

View our latest analysis for Zhejiang Wansheng

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Zhejiang Wansheng's profit was reduced by CN¥23m, due to unusual items, over the last year. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect Zhejiang Wansheng 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 Zhejiang Wansheng's Profit Performance

Because unusual items detracted from Zhejiang Wansheng'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 Zhejiang Wansheng'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. 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. For example - Zhejiang Wansheng has 2 warning signs we think you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of Zhejiang Wansheng'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. 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.

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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.