We Think Changan Minsheng APLL Logistics' (HKG:1292) Robust Earnings Are Conservative

Even though Changan Minsheng APLL Logistics Co., Ltd.'s (HKG:1292) recent earnings release was robust, the market didn't seem to notice. Our analysis suggests that investors might be missing some promising details.

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In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. In fact, Changan Minsheng APLL Logistics increased the number of shares on issue by 25% over the last twelve months by issuing new shares. Therefore, each share now receives a smaller portion of profit. To talk about net income, without noticing earnings per share, is to be distracted by the big numbers while ignoring the smaller numbers that talk to per share value. You can see a chart of Changan Minsheng APLL Logistics' EPS by clicking here.

A Look At The Impact Of Changan Minsheng APLL Logistics' Dilution On Its Earnings Per Share (EPS)

Changan Minsheng APLL Logistics has improved its profit over the last three years, with an annualized gain of 64% in that time. And the 25% profit boost in the last year certainly seems impressive at first glance. On the other hand, earnings per share are only up 18% in that time. And so, you can see quite clearly that dilution is having a rather significant impact on shareholders.

In the long term, earnings per share growth should beget share price growth. So Changan Minsheng APLL Logistics shareholders will want to see that EPS figure continue to increase. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. For the ordinary retail shareholder, EPS is a great measure to check your hypothetical "share" of the company's profit.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Changan Minsheng APLL Logistics.

How Do Unusual Items Influence Profit?

On top of the dilution, we should also consider the CN¥44m impact of unusual items in the last year, which had the effect of suppressing profit. 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. Changan Minsheng APLL Logistics took a rather significant hit from unusual items in the year to June 2025. All else being equal, this would likely have the effect of making the statutory profit look worse than its underlying earnings power.

Our Take On Changan Minsheng APLL Logistics' Profit Performance

To sum it all up, Changan Minsheng APLL Logistics took a hit from unusual items which pushed its profit down; without that, it would have made more money. But unfortunately the dilution means that shareholders now own a smaller proportion of the company (assuming they maintained the same number of shares). That will weigh on earnings per share, even if it is not reflected in net income. After taking into account all these factors, we think that Changan Minsheng APLL Logistics' statutory results are a decent reflection of its underlying earnings power. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. At Simply Wall St, we found 3 warning signs for Changan Minsheng APLL Logistics and we think they deserve your attention.

Our examination of Changan Minsheng APLL Logistics has focussed on certain factors that can make its earnings look better than they are. But there is always more to discover if you are capable of focussing your mind on minutiae. 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.