We Think You Can Look Beyond Yeebo (International Holdings)'s (HKG:259) Lackluster Earnings

Shareholders appeared unconcerned with Yeebo (International Holdings) Limited's (HKG:259) lackluster earnings report last week. We did some digging, and we believe the earnings are stronger than they seem.

See our latest analysis for Yeebo (International Holdings)

The Impact Of Unusual Items On Profit

For anyone who wants to understand Yeebo (International Holdings)'s profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by HK$19m due 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 that's hardly a surprise given these line items are considered unusual. In the twelve months to March 2024, Yeebo (International Holdings) had a big unusual items expense. All else being equal, this would likely have the effect of making the statutory profit look worse than its underlying earnings power.

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

Our Take On Yeebo (International Holdings)'s Profit Performance

As we mentioned previously, the Yeebo (International Holdings)'s profit was hampered by unusual items in the last year. Because of this, we think Yeebo (International Holdings)'s underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! Unfortunately, though, its earnings per share actually fell back over the 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. If you want to do dive deeper into Yeebo (International Holdings), you'd also look into what risks it is currently facing. You'd be interested to know, that we found 1 warning sign for Yeebo (International Holdings) and you'll want to know about this.

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

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