TBH Global's (KRX:084870) Profits May Not Reveal Underlying Issues

The market for TBH Global Co., Ltd's (KRX:084870) stock was strong after it released a healthy earnings report last week. Despite this, our analysis suggests that there are some factors weakening the foundations of those good profit numbers.

View our latest analysis for TBH Global

How Do Unusual Items Influence Profit?

Importantly, our data indicates that TBH Global's profit received a boost of ₩1.4b in unusual items, over the last year. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And, after all, that's exactly what the accounting terminology implies. If TBH Global doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current year.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of TBH Global.

Our Take On TBH Global's Profit Performance

Arguably, TBH Global's statutory earnings have been distorted by unusual items boosting profit. Because of this, we think that it may be that TBH Global's statutory profits are better than its underlying earnings power. But at least holders can take some solace from the 37% EPS growth in 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 TBH Global, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 3 warning signs for TBH Global and you'll want to know about them.

This note has only looked at a single factor that sheds light on the nature of TBH Global's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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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.