We Think That There Are Some Issues For Chien Shing Harbour Service (TWSE:8367) Beyond Its Promising Earnings

Chien Shing Harbour Service Co. , Ltd's (TWSE:8367) robust recent earnings didn't do much to move the stock. We believe that shareholders have noticed some concerning factors beyond the statutory profit numbers.

Check out our latest analysis for Chien Shing Harbour Service

How Do Unusual Items Influence Profit?

For anyone who wants to understand Chien Shing Harbour Service's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from NT$55m worth of unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. 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 Chien Shing Harbour Service 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 Chien Shing Harbour Service.

Our Take On Chien Shing Harbour Service's Profit Performance

Arguably, Chien Shing Harbour Service's statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that Chien Shing Harbour Service's true underlying earnings power is actually less than its statutory profit. Nonetheless, it's still worth noting that its earnings per share have grown at 19% over the last three years. 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 Chien Shing Harbour Service as a business, it's important to be aware of any risks it's facing. When we did our research, we found 2 warning signs for Chien Shing Harbour Service (1 is a bit concerning!) that we believe deserve your full attention.

This note has only looked at a single factor that sheds light on the nature of Chien Shing Harbour Service'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 that insiders are buying.

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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.