Shenzhen Ysstech Info-TechLtd's (SZSE:300377) Earnings May Just Be The Starting Point

When companies post strong earnings, the stock generally performs well, just like Shenzhen Ysstech Info-Tech Co.,Ltd's (SZSE:300377) stock has recently. We did some digging and found some further encouraging factors that investors will like.

Check out our latest analysis for Shenzhen Ysstech Info-TechLtd

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Shenzhen Ysstech Info-TechLtd's profit was reduced by CN¥21m, due to unusual items, over the last year. 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, after all, that's exactly what the accounting terminology implies. If Shenzhen Ysstech Info-TechLtd doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Shenzhen Ysstech Info-TechLtd.

Our Take On Shenzhen Ysstech Info-TechLtd's Profit Performance

Because unusual items detracted from Shenzhen Ysstech Info-TechLtd's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Based on this observation, we consider it likely that Shenzhen Ysstech Info-TechLtd's statutory profit actually understates its earnings potential! And on top of that, its earnings per share have grown at an extremely impressive rate over the last year. 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. If you want to do dive deeper into Shenzhen Ysstech Info-TechLtd, you'd also look into what risks it is currently facing. For example, Shenzhen Ysstech Info-TechLtd has 4 warning signs (and 2 which are potentially serious) we think you should know about.

This note has only looked at a single factor that sheds light on the nature of Shenzhen Ysstech Info-TechLtd'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 that insiders are buying.

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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.