Samyang Tongsang's (KRX:002170) Solid Earnings Are Supported By Other Strong Factors

Samyang Tongsang Co., Ltd (KRX:002170) just reported healthy earnings but the stock price didn't move much. Our analysis suggests that investors might be missing some promising details.

Our free stock report includes 3 warning signs investors should be aware of before investing in Samyang Tongsang. Read for free now.

The Impact Of Unusual Items On Profit

For anyone who wants to understand Samyang Tongsang's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by ₩14b due to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. 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. Samyang Tongsang took a rather significant hit from unusual items in the year to March 2025. 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 Samyang Tongsang.

Our Take On Samyang Tongsang's Profit Performance

As we discussed above, we think the significant unusual expense will make Samyang Tongsang's statutory profit lower than it would otherwise have been. Based on this observation, we consider it possible that Samyang Tongsang's statutory profit actually understates its earnings potential! And the EPS is up 22% over the last twelve months. 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. 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. Every company has risks, and we've spotted 3 warning signs for Samyang Tongsang (of which 1 is concerning!) you should know about.

This note has only looked at a single factor that sheds light on the nature of Samyang Tongsang'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.