We Like The Quality Of Samhwa Paints Industrial's (KRX:000390) Earnings

Investors signalled that they were pleased with Samhwa Paints Industrial Co., Ltd.'s (KRX:000390) most recent earnings report. This reaction by the market reaction is understandable when looking at headline profits and we have found some further encouraging factors.

See our latest analysis for Samhwa Paints Industrial

The Impact Of Unusual Items On Profit

For anyone who wants to understand Samhwa Paints Industrial's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by ₩2.7b due to unusual items. 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, after all, that's exactly what the accounting terminology implies. Assuming those unusual expenses don't come up again, we'd therefore expect Samhwa Paints Industrial to produce a higher profit next year, all else being equal.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Samhwa Paints Industrial.

Our Take On Samhwa Paints Industrial's Profit Performance

Because unusual items detracted from Samhwa Paints Industrial's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Samhwa Paints Industrial's earnings potential is at least as good as it seems, and maybe even better! Furthermore, it has done a great job growing EPS over the 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 want to do dive deeper into Samhwa Paints Industrial, you'd also look into what risks it is currently facing. For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of Samhwa Paints Industrial.

Today we've zoomed in on a single data point to better understand the nature of Samhwa Paints Industrial'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.