Woojin's (KRX:105840) Shareholders May Want To Dig Deeper Than Statutory Profit

The stock price didn't jump after Woojin Inc. (KRX:105840) posted decent earnings last week. Our analysis showed that there are some concerning factors in the earnings that investors may be cautious of.

Check out our latest analysis for Woojin

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Woojin's profit received a boost of ₩2.0b in unusual items, over the last year. 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. Which is hardly surprising, given the name. If Woojin 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 Woojin.

Our Take On Woojin's Profit Performance

We'd posit that Woojin's statutory earnings aren't a clean read on ongoing productivity, due to the large unusual item. Because of this, we think that it may be that Woojin's statutory profits are better than its underlying earnings power. The good news is that, its earnings per share increased by 17% 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'd like to know more about Woojin as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Woojin, and understanding it should be part of your investment process.

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