Yes Optoelectronics (Group)'s (SZSE:002952) Anemic Earnings Might Be Worse Than You Think

Last week's earnings announcement from Yes Optoelectronics (Group) Co., Ltd. (SZSE:002952) was disappointing to investors, with a sluggish profit figure. We did some further digging and think they have a few more reasons to be concerned beyond the statutory profit.

View our latest analysis for Yes Optoelectronics (Group)

How Do Unusual Items Influence Profit?

For anyone who wants to understand Yes Optoelectronics (Group)'s profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from CN¥11m worth of unusual items. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. 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. We can see that Yes Optoelectronics (Group)'s positive unusual items were quite significant relative to its profit in the year to September 2024. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Yes Optoelectronics (Group).

Our Take On Yes Optoelectronics (Group)'s Profit Performance

As we discussed above, we think the significant positive unusual item makes Yes Optoelectronics (Group)'s earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Yes Optoelectronics (Group)'s underlying earnings power is lower than its statutory profit. Sadly, its EPS was down over the last twelve months. 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 Yes Optoelectronics (Group), you'd also look into what risks it is currently facing. To help with this, we've discovered 4 warning signs (2 are a bit concerning!) that you ought to be aware of before buying any shares in Yes Optoelectronics (Group).

Today we've zoomed in on a single data point to better understand the nature of Yes Optoelectronics (Group)'s profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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.