Investors Shouldn't Be Too Comfortable With Daesung Holdings' (KRX:016710) Earnings

Daesung Holdings Co., Ltd. (KRX:016710) just reported some strong earnings, and the market reacted accordingly with a healthy uplift in the share price. However, our analysis suggests that shareholders may be missing some factors that indicate the earnings result was not as good as it looked.

We've discovered 1 warning sign about Daesung Holdings. View them for free.

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Daesung Holdings' profit received a boost of ₩8.7b in unusual items, over the last year. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And that's as you'd expect, given these boosts are described as 'unusual'. Daesung Holdings 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 Daesung Holdings.

Our Take On Daesung Holdings' Profit Performance

As we discussed above, we think the significant positive unusual item makes Daesung Holdings' earnings a poor guide to its underlying profitability. For this reason, we think that Daesung Holdings' statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. But the good news is that its EPS growth over the last three years has been very impressive. 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 Daesung Holdings, you'd also look into what risks it is currently facing. Case in point: We've spotted 1 warning sign for Daesung Holdings you should be aware of.

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