Some Investors May Be Willing To Look Past Hanil Feed's (KOSDAQ:005860) Soft Earnings

Soft earnings didn't appear to concern Hanil Feed Co., Ltd.'s (KOSDAQ:005860) shareholders over the last week. We did some digging, and we believe the earnings are stronger than they seem.

See our latest analysis for Hanil Feed

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Hanil Feed's profit was reduced by ₩910m, due to unusual items, over the last year. 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. Hanil Feed took a rather significant hit from unusual items in the year to September 2024. 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 Hanil Feed.

Our Take On Hanil Feed's Profit Performance

As we discussed above, we think the significant unusual expense will make Hanil Feed's statutory profit lower than it would otherwise have been. Based on this observation, we consider it possible that Hanil Feed's statutory profit actually understates its earnings potential! 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'd like to know more about Hanil Feed as a business, it's important to be aware of any risks it's facing. Our analysis shows 3 warning signs for Hanil Feed (1 can't be ignored!) and we strongly recommend you look at these before investing.

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