Jiangsu HHCK Advanced MaterialsLtd's (SHSE:688535) Shareholders May Want To Dig Deeper Than Statutory Profit

Jiangsu HHCK Advanced Materials Co.,Ltd's (SHSE:688535) healthy profit numbers didn't contain any surprises for investors. We think this is due to investors looking beyond the statutory profits and being concerned with what they see.

See our latest analysis for Jiangsu HHCK Advanced MaterialsLtd

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Jiangsu HHCK Advanced MaterialsLtd's profit received a boost of CN¥4.8m in unusual items, over the last year. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And, after all, that's exactly what the accounting terminology implies. If Jiangsu HHCK Advanced MaterialsLtd doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current year.

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 Jiangsu HHCK Advanced MaterialsLtd's Profit Performance

Arguably, Jiangsu HHCK Advanced MaterialsLtd's statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that Jiangsu HHCK Advanced MaterialsLtd's true underlying earnings power is actually less 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. If you'd like to know more about Jiangsu HHCK Advanced MaterialsLtd as a business, it's important to be aware of any risks it's facing. For example - Jiangsu HHCK Advanced MaterialsLtd has 1 warning sign we think you should be aware of.

This note has only looked at a single factor that sheds light on the nature of Jiangsu HHCK Advanced MaterialsLtd's 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.