We Think You Should Be Aware Of Some Concerning Factors In COSCO SHIPPING Specialized CarriersLtd's (SHSE:600428) Earnings

COSCO SHIPPING Specialized Carriers Co.,Ltd.'s (SHSE:600428) healthy profit numbers didn't contain any surprises for investors. However the statutory profit number doesn't tell the whole story, and we have found some factors which might be of concern to shareholders.

See our latest analysis for COSCO SHIPPING Specialized CarriersLtd

The Impact Of Unusual Items On Profit

For anyone who wants to understand COSCO SHIPPING Specialized CarriersLtd's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from CN¥316m 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. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. Which is hardly surprising, given the name. We can see that COSCO SHIPPING Specialized CarriersLtd's positive unusual items were quite significant relative to its profit in the year to March 2024. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

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 COSCO SHIPPING Specialized CarriersLtd's Profit Performance

As previously mentioned, COSCO SHIPPING Specialized CarriersLtd's large boost from unusual items won't be there indefinitely, so its statutory earnings are probably a poor guide to its underlying profitability. For this reason, we think that COSCO SHIPPING Specialized CarriersLtd's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. But the good news is that its EPS growth over the last three years has been very impressive. 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. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. While conducting our analysis, we found that COSCO SHIPPING Specialized CarriersLtd has 3 warning signs and it would be unwise to ignore these.

This note has only looked at a single factor that sheds light on the nature of COSCO SHIPPING Specialized CarriersLtd'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. 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.