We Like Luks Group (Vietnam Holdings)'s (HKG:366) Earnings For More Than Just Statutory Profit

Shareholders appeared to be happy with Luks Group (Vietnam Holdings) Company Limited's (HKG:366) solid earnings report last week. According to our analysis of the report, the strong headline profit numbers are supported by strong earnings fundamentals.

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How Do Unusual Items Influence Profit?

To properly understand Luks Group (Vietnam Holdings)'s profit results, we need to consider the HK$48m expense attributed to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. In the twelve months to June 2025, Luks Group (Vietnam Holdings) had a big unusual items expense. As a result, we can surmise that the unusual items made its statutory profit significantly weaker than it would otherwise be.

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

Our Take On Luks Group (Vietnam Holdings)'s Profit Performance

As we mentioned previously, the Luks Group (Vietnam Holdings)'s profit was hampered by unusual items in the last year. Because of this, we think Luks Group (Vietnam Holdings)'s underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! And one can definitely find a positive in the fact that it made a profit this year, despite losing money last year. 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. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For instance, we've identified 4 warning signs for Luks Group (Vietnam Holdings) (1 is concerning) you should be familiar with.

This note has only looked at a single factor that sheds light on the nature of Luks Group (Vietnam Holdings)'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.