We Think Shenzhen Fortune Trend technology's (SHSE:688318) Robust Earnings Are Conservative

Shenzhen Fortune Trend technology Co., Ltd.'s (SHSE:688318) strong earnings report was rewarded with a positive stock price move. We did some digging and found some further encouraging factors that investors will like.

Check out our latest analysis for Shenzhen Fortune Trend technology

How Do Unusual Items Influence Profit?

To properly understand Shenzhen Fortune Trend technology's profit results, we need to consider the CN¥39m expense attributed to unusual items. 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 Shenzhen Fortune Trend technology 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 Shenzhen Fortune Trend technology's Profit Performance

Unusual items (expenses) detracted from Shenzhen Fortune Trend technology's earnings over the last year, but we might see an improvement next year. Because of this, we think Shenzhen Fortune Trend technology's earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share increased by 66% in the last year. 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. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. You'd be interested to know, that we found 1 warning sign for Shenzhen Fortune Trend technology and you'll want to know about this.

This note has only looked at a single factor that sheds light on the nature of Shenzhen Fortune Trend technology'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. 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.