Moorim SP's (KOSDAQ:001810) Earnings Are Of Questionable Quality

Moorim SP Co., Ltd.'s (KOSDAQ:001810) robust earnings report didn't manage to move the market for its stock. We did some digging, and we found some concerning factors in the details.

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The Impact Of Unusual Items On Profit

For anyone who wants to understand Moorim SP's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from ₩7.9b worth of unusual items. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And, after all, that's exactly what the accounting terminology implies. Moorim SP had a rather significant contribution from unusual items relative to its profit to March 2025. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

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

Our Take On Moorim SP's Profit Performance

As we discussed above, we think the significant positive unusual item makes Moorim SP's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Moorim SP's underlying earnings power is lower than its statutory profit. On the bright side, the company showed enough improvement to book a profit this year, after losing money last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. 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. You'd be interested to know, that we found 2 warning signs for Moorim SP and you'll want to know about these.

Today we've zoomed in on a single data point to better understand the nature of Moorim SP'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. 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.