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Shengyi TechnologyLtd's (SHSE:600183) Weak Earnings May Only Reveal A Part Of The Whole Picture
The subdued market reaction suggests that Shengyi Technology Co.,Ltd.'s (SHSE:600183) recent earnings didn't contain any surprises. We think that investors are worried about some weaknesses underlying the earnings.
View our latest analysis for Shengyi TechnologyLtd
The Impact Of Unusual Items On Profit
For anyone who wants to understand Shengyi TechnologyLtd's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from CNÂ¥139m worth of unusual items. 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. Which is hardly surprising, given the name. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is).
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 Shengyi TechnologyLtd's Profit Performance
Arguably, Shengyi TechnologyLtd's statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that Shengyi TechnologyLtd's true underlying earnings power is actually less than its statutory profit. In further bad news, its earnings per share decreased in 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. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example - Shengyi TechnologyLtd 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 Shengyi TechnologyLtd'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.
About SHSE:600183
Shengyi TechnologyLtd
Develops, manufactures, and sells laminates in China.
Flawless balance sheet with proven track record and pays a dividend.