Some Investors May Be Willing To Look Past Pangang Group Vanadium & Titanium Resources' (SZSE:000629) Soft Earnings

The market for Pangang Group Vanadium & Titanium Resources Co., Ltd.'s (SZSE:000629) shares didn't move much after it posted weak earnings recently. We did some digging, and we believe the earnings are stronger than they seem.

See our latest analysis for Pangang Group Vanadium & Titanium Resources

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Pangang Group Vanadium & Titanium Resources' profit was reduced by CN¥79m, 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 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 Pangang Group Vanadium & Titanium Resources 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 Pangang Group Vanadium & Titanium Resources' Profit Performance

Unusual items (expenses) detracted from Pangang Group Vanadium & Titanium Resources' earnings over the last year, but we might see an improvement next year. Because of this, we think Pangang Group Vanadium & Titanium Resources' 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 while earnings quality is important, it's equally important to consider the risks facing Pangang Group Vanadium & Titanium Resources at this point in time. You'd be interested to know, that we found 1 warning sign for Pangang Group Vanadium & Titanium Resources and you'll want to know about this.

Today we've zoomed in on a single data point to better understand the nature of Pangang Group Vanadium & Titanium Resources' 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.