We Like Beijing ZZNode Technologies' (SZSE:003007) Earnings For More Than Just Statutory Profit

The stock was sluggish on the back of Beijing ZZNode Technologies Co., Ltd.'s (SZSE:003007) recent earnings report. We have done some analysis, and found some encouraging factors that we believe the shareholders should consider.

See our latest analysis for Beijing ZZNode Technologies

How Do Unusual Items Influence Profit?

To properly understand Beijing ZZNode Technologies' profit results, we need to consider the CN¥14m expense attributed to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. 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. In the twelve months to September 2024, Beijing ZZNode Technologies had a big unusual items expense. As a result, we can surmise that the unusual items made its statutory profit significantly weaker 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 Beijing ZZNode Technologies.

Our Take On Beijing ZZNode Technologies' Profit Performance

As we mentioned previously, the Beijing ZZNode Technologies' profit was hampered by unusual items in the last year. Based on this observation, we consider it possible that Beijing ZZNode Technologies' statutory profit actually understates its earnings potential! Furthermore, it has done a great job growing EPS over 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. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example - Beijing ZZNode Technologies has 1 warning sign we think you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of Beijing ZZNode Technologies' 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 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.