Jiangsu Feiliks International Logistics' (SZSE:300240) Problems Go Beyond Weak Profit

Jiangsu Feiliks International Logistics Inc.'s (SZSE:300240) recent weak earnings report didn't cause a big stock movement. We think that investors are worried about some weaknesses underlying the earnings.

See our latest analysis for Jiangsu Feiliks International Logistics

How Do Unusual Items Influence Profit?

To properly understand Jiangsu Feiliks International Logistics' profit results, we need to consider the CN¥118m gain attributed to unusual items. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. 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 Jiangsu Feiliks International Logistics' positive unusual items were quite significant relative to its profit in the year to June 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 Jiangsu Feiliks International Logistics.

Our Take On Jiangsu Feiliks International Logistics' Profit Performance

As we discussed above, we think the significant positive unusual item makes Jiangsu Feiliks International Logistics' earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Jiangsu Feiliks International Logistics' underlying earnings power is lower than its statutory profit. In further bad news, its earnings per share decreased in the last year. 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 Jiangsu Feiliks International Logistics, you'd also look into what risks it is currently facing. For instance, we've identified 3 warning signs for Jiangsu Feiliks International Logistics (1 makes us a bit uncomfortable) you should be familiar with.

Today we've zoomed in on a single data point to better understand the nature of Jiangsu Feiliks International Logistics' 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.