There May Be Underlying Issues With The Quality Of Tien Wah Press Holdings Berhad's (KLSE:TIENWAH) Earnings

Tien Wah Press Holdings Berhad's (KLSE:TIENWAH) robust earnings report didn't manage to move the market for its stock. Our analysis suggests that shareholders have noticed something concerning in the numbers.

Check out our latest analysis for Tien Wah Press Holdings Berhad

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Tien Wah Press Holdings Berhad's profit received a boost of RM1.7m 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. 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. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is).

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Tien Wah Press Holdings Berhad.

Our Take On Tien Wah Press Holdings Berhad's Profit Performance

Arguably, Tien Wah Press Holdings Berhad's statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that Tien Wah Press Holdings Berhad's true underlying earnings power is actually less than its statutory profit. The good news is that it earned a profit in the last twelve months, despite its previous loss. 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. If you'd like to know more about Tien Wah Press Holdings Berhad as a business, it's important to be aware of any risks it's facing. To that end, you should learn about the 2 warning signs we've spotted with Tien Wah Press Holdings Berhad (including 1 which makes us a bit uncomfortable).

This note has only looked at a single factor that sheds light on the nature of Tien Wah Press Holdings Berhad'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. 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.