Tien Wah Press Holdings Berhad (KLSE:TIENWAH) Posted Healthy Earnings But There Are Some Other Factors To Be Aware Of

Tien Wah Press Holdings Berhad's (KLSE:TIENWAH) stock was strong after they recently reported robust earnings. However, our analysis suggests that shareholders may be missing some factors that indicate the earnings result was not as good as it looked.

Check out our latest analysis for Tien Wah Press Holdings Berhad

The Impact Of Unusual Items On Profit

To properly understand Tien Wah Press Holdings Berhad's profit results, we need to consider the RM1.7m gain attributed to 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'. If Tien Wah Press Holdings Berhad 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 Tien Wah Press Holdings Berhad.

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

We'd posit that Tien Wah Press Holdings Berhad'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 Tien Wah Press Holdings Berhad's statutory profits are better than its underlying earnings power. The good news is that it earned a profit in the last twelve months, despite its previous loss. 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 want to do dive deeper into Tien Wah Press Holdings Berhad, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 2 warning signs with Tien Wah Press Holdings Berhad, and understanding these should be part of your investment process.

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. 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 that insiders are buying 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.