Beijing UniStrong Science&TechnologyLtd's (SZSE:002383) Earnings Offer More Than Meets The Eye

The market seemed underwhelmed by last week's earnings announcement from Beijing UniStrong Science&Technology Co.,Ltd. (SZSE:002383) despite the healthy numbers. Our analysis suggests that shareholders might be missing some positive underlying factors in the earnings report.

See our latest analysis for Beijing UniStrong Science&TechnologyLtd

The Impact Of Unusual Items On Profit

To properly understand Beijing UniStrong Science&TechnologyLtd's profit results, we need to consider the CN¥37m 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, after all, that's exactly what the accounting terminology implies. If Beijing UniStrong Science&TechnologyLtd 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 Beijing UniStrong Science&TechnologyLtd.

Our Take On Beijing UniStrong Science&TechnologyLtd's Profit Performance

Because unusual items detracted from Beijing UniStrong Science&TechnologyLtd's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Beijing UniStrong Science&TechnologyLtd's earnings potential is at least as good as it seems, and maybe even better! And it's also positive that the company showed enough improvement to book a profit this year, after losing money 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. While it's very important to consider the profit and loss statement, you can also learn a lot about a company by looking at its balance sheet. If you're interested we have a graphic representation of Beijing UniStrong Science&TechnologyLtd's balance sheet.

Today we've zoomed in on a single data point to better understand the nature of Beijing UniStrong Science&TechnologyLtd's profit. But there are plenty of other ways to inform your opinion of a company. 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.