Tiong Woon Corporation Holding's (SGX:BQM) Earnings Are Weaker Than They Seem

Despite posting some strong earnings, the market for Tiong Woon Corporation Holding Ltd's (SGX:BQM) stock hasn't moved much. Our analysis suggests that shareholders have noticed something concerning in the numbers.

See our latest analysis for Tiong Woon Corporation Holding

The Impact Of Unusual Items On Profit

For anyone who wants to understand Tiong Woon Corporation Holding's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from S$4.6m worth of unusual items. 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 crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. 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).

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Tiong Woon Corporation Holding's Profit Performance

Arguably, Tiong Woon Corporation Holding's statutory earnings have been distorted by unusual items boosting profit. Because of this, we think that it may be that Tiong Woon Corporation Holding's statutory profits are better than its underlying earnings power. But on the bright side, its earnings per share have grown at an extremely impressive rate over the last three years. 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 Tiong Woon Corporation Holding, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Tiong Woon Corporation Holding has 2 warning signs and it would be unwise to ignore them.

This note has only looked at a single factor that sheds light on the nature of Tiong Woon Corporation Holding's profit. But there are plenty of other ways to inform your opinion of a company. 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. 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.