- Hong Kong
- /
- Oil and Gas
- /
- SEHK:934
Sinopec Kantons Holdings' (HKG:934) Profits Appear To Have Quality Issues
The recent earnings posted by Sinopec Kantons Holdings Limited (HKG:934) were solid, but the stock didn't move as much as we expected. However the statutory profit number doesn't tell the whole story, and we have found some factors which might be of concern to shareholders.
Check out our latest analysis for Sinopec Kantons Holdings
The Impact Of Unusual Items On Profit
Importantly, our data indicates that Sinopec Kantons Holdings' profit received a boost of HK$16m in unusual items, over the last year. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. 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. If Sinopec Kantons Holdings doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current year.
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 Sinopec Kantons Holdings' Profit Performance
Arguably, Sinopec Kantons Holdings' statutory earnings have been distorted by unusual items boosting profit. Because of this, we think that it may be that Sinopec Kantons Holdings' statutory profits are better than its underlying earnings power. The good news is that, its earnings per share increased by 17% 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. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Sinopec Kantons Holdings, and understanding it should be part of your investment process.
This note has only looked at a single factor that sheds light on the nature of Sinopec Kantons Holdings' 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. 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.
When trading Sinopec Kantons Holdings or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
New: Manage All Your Stock Portfolios in One Place
We've created the ultimate portfolio companion for stock investors, and it's free.
• Connect an unlimited number of Portfolios and see your total in one currency
• Be alerted to new Warning Signs or Risks via email or mobile
• Track the Fair Value of your stocks
This article by Simply Wall St is general in nature. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
About SEHK:934
Sinopec Kantons Holdings
An investment holding company, provides crude oil jetty services.
Flawless balance sheet with proven track record and pays a dividend.