HARBIN GLORIA PHARMACEUTICALS' (SZSE:002437) Solid Earnings May Rest On Weak Foundations

HARBIN GLORIA PHARMACEUTICALS Co., LTD's (SZSE:002437) healthy profit numbers didn't contain any surprises for investors. 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 HARBIN GLORIA PHARMACEUTICALS

The Impact Of Unusual Items On Profit

For anyone who wants to understand HARBIN GLORIA PHARMACEUTICALS' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from CN¥95m worth of unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. 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. Which is hardly surprising, given the name. HARBIN GLORIA PHARMACEUTICALS had a rather significant contribution from unusual items relative to its profit to September 2024. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of HARBIN GLORIA PHARMACEUTICALS.

Our Take On HARBIN GLORIA PHARMACEUTICALS' Profit Performance

As we discussed above, we think the significant positive unusual item makes HARBIN GLORIA PHARMACEUTICALS' earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that HARBIN GLORIA PHARMACEUTICALS' underlying earnings power is lower than its statutory profit. The good news is that it earned a profit in the last twelve months, despite its previous loss. 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 HARBIN GLORIA PHARMACEUTICALS at this point in time. At Simply Wall St, we found 2 warning signs for HARBIN GLORIA PHARMACEUTICALS and we think they deserve your attention.

This note has only looked at a single factor that sheds light on the nature of HARBIN GLORIA PHARMACEUTICALS' 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.

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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.