Weak Statutory Earnings May Not Tell The Whole Story For Jutze Intelligence TechnologyLtd (SZSE:300802)

Jutze Intelligence Technology Co.,Ltd's (SZSE:300802) recent weak earnings report didn't cause a big stock movement. However, we believe that investors should be aware of some underlying factors which may be of concern.

Check out our latest analysis for Jutze Intelligence TechnologyLtd

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Jutze Intelligence TechnologyLtd's profit received a boost of CN¥6.9m in unusual items, over the last year. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And, after all, that's exactly what the accounting terminology implies. 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).

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Jutze Intelligence TechnologyLtd.

Our Take On Jutze Intelligence TechnologyLtd's Profit Performance

Arguably, Jutze Intelligence TechnologyLtd's statutory earnings have been distorted by unusual items boosting profit. Because of this, we think that it may be that Jutze Intelligence TechnologyLtd's statutory profits are better than its underlying earnings power. Sadly, its EPS was down over the last twelve months. 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 Jutze Intelligence TechnologyLtd, you'd also look into what risks it is currently facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Jutze Intelligence TechnologyLtd.

Today we've zoomed in on a single data point to better understand the nature of Jutze Intelligence TechnologyLtd'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. 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.