We Like The Quality Of Aoshikang Technology's (SZSE:002913) Earnings

Aoshikang Technology Co., Ltd.'s (SZSE:002913) recent earnings report didn't offer any surprises, with the shares unchanged over the last week. We did some analysis to find out why and believe that investors might be missing some encouraging factors contained in the earnings.

Check out our latest analysis for Aoshikang Technology

How Do Unusual Items Influence Profit?

For anyone who wants to understand Aoshikang Technology's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by CN¥90m due 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, after all, that's exactly what the accounting terminology implies. Assuming those unusual expenses don't come up again, we'd therefore expect Aoshikang Technology to produce a higher profit next year, all else being equal.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Aoshikang Technology.

Our Take On Aoshikang Technology's Profit Performance

Because unusual items detracted from Aoshikang Technology'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 Aoshikang Technology's earnings potential is at least as good as it seems, and maybe even better! And the EPS is up 6.0% annually, over the last three years. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you want to do dive deeper into Aoshikang Technology, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 1 warning sign for Aoshikang Technology you should know about.

Today we've zoomed in on a single data point to better understand the nature of Aoshikang Technology'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. 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.