Why China-Singapore Suzhou Industrial Park Development Group's (SHSE:601512) Shaky Earnings Are Just The Beginning Of Its Problems

Investors were disappointed by China-Singapore Suzhou Industrial Park Development Group Co., Ltd.'s (SHSE:601512 ) latest earnings release. We did some further digging and think they have a few more reasons to be concerned beyond the statutory profit.

View our latest analysis for China-Singapore Suzhou Industrial Park Development Group

How Do Unusual Items Influence Profit?

To properly understand China-Singapore Suzhou Industrial Park Development Group's profit results, we need to consider the CN¥447m gain attributed to unusual items. 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. We can see that China-Singapore Suzhou Industrial Park Development Group's positive unusual items were quite significant relative to its profit in the year to December 2023. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

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 China-Singapore Suzhou Industrial Park Development Group's Profit Performance

As we discussed above, we think the significant positive unusual item makes China-Singapore Suzhou Industrial Park Development Group's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that China-Singapore Suzhou Industrial Park Development Group's underlying earnings power is lower than its statutory profit. Sadly, its EPS was down over the last twelve months. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Case in point: We've spotted 2 warning signs for China-Singapore Suzhou Industrial Park Development Group you should be aware of.

This note has only looked at a single factor that sheds light on the nature of China-Singapore Suzhou Industrial Park Development Group's profit. But there are plenty of other ways to inform your opinion of a company. 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 that insiders are buying 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.