DAEYANG ELECTRIC.Co.Ltd (KOSDAQ:108380) Posted Healthy Earnings But There Are Some Other Factors To Be Aware Of

Unsurprisingly, DAEYANG ELECTRIC.Co.,Ltd.'s (KOSDAQ:108380) stock price was strong on the back of its healthy earnings report. However, our analysis suggests that shareholders may be missing some factors that indicate the earnings result was not as good as it looked.

Check out our latest analysis for DAEYANG ELECTRIC.Co.Ltd

The Impact Of Unusual Items On Profit

To properly understand DAEYANG ELECTRIC.Co.Ltd's profit results, we need to consider the ₩2.7b gain attributed to unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And that's as you'd expect, given these boosts are described as 'unusual'. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is).

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 DAEYANG ELECTRIC.Co.Ltd's Profit Performance

Arguably, DAEYANG ELECTRIC.Co.Ltd's statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that DAEYANG ELECTRIC.Co.Ltd's true underlying earnings power is actually less than its statutory profit. On the bright side, the company showed enough improvement to book a profit this year, after losing money 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'd like to know more about DAEYANG ELECTRIC.Co.Ltd as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 2 warning signs for DAEYANG ELECTRIC.Co.Ltd you should be aware of.

This note has only looked at a single factor that sheds light on the nature of DAEYANG ELECTRIC.Co.Ltd's profit. 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. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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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.