Suprema HQ (KOSDAQ:094840) Posted Healthy Earnings But There Are Some Other Factors To Be Aware Of

Last week's profit announcement from Suprema HQ Inc. (KOSDAQ:094840) was underwhelming for investors, despite headline numbers being robust. We did some digging and found some worrying underlying problems.

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The Impact Of Unusual Items On Profit

For anyone who wants to understand Suprema HQ's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from ₩4.2b 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 that's as you'd expect, given these boosts are described as 'unusual'. We can see that Suprema HQ's positive unusual items were quite significant relative to its profit in the year to March 2025. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.

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

Our Take On Suprema HQ's Profit Performance

As we discussed above, we think the significant positive unusual item makes Suprema HQ's earnings a poor guide to its underlying profitability. For this reason, we think that Suprema HQ's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. But on the bright side, its earnings per share have grown at an extremely impressive rate over the last three years. 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. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that Suprema HQ has 3 warning signs and it would be unwise to ignore these.

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