Some May Be Optimistic About Shaanxi Jinye Science Technology and Education GroupLtd’s (SZSE:000812) Earnings

The market was pleased with the recent earnings report from Shaanxi Jinye Science Technology and Education Group Co.,Ltd (SZSE:000812), despite the profit numbers being soft. We think that investors might be looking at some positive factors beyond the earnings numbers.

View our latest analysis for Shaanxi Jinye Science Technology and Education GroupLtd

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SZSE:000812 Earnings and Revenue History May 2nd 2024

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Shaanxi Jinye Science Technology and Education GroupLtd’s profit was reduced by CN¥24m, due to unusual items, over the last year. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that’s hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don’t come up again, we’d therefore expect Shaanxi Jinye Science Technology and Education GroupLtd to produce a higher profit next year, all else being equal.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Shaanxi Jinye Science Technology and Education GroupLtd.

Our Take On Shaanxi Jinye Science Technology and Education GroupLtd’s Profit Performance

Because unusual items detracted from Shaanxi Jinye Science Technology and Education GroupLtd’s earnings over the last year, you could argue that we can expect an improved result in the current quarter. Based on this observation, we consider it likely that Shaanxi Jinye Science Technology and Education GroupLtd’s statutory profit actually understates its earnings potential! And on top of that, its earnings per share have grown at an extremely impressive rate over the last three years. 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. So while earnings quality is important, it’s equally important to consider the risks facing Shaanxi Jinye Science Technology and Education GroupLtd at this point in time. Our analysis shows 3 warning signs for Shaanxi Jinye Science Technology and Education GroupLtd (1 makes us a bit uncomfortable!) and we strongly recommend you look at them before investing.

Today we’ve zoomed in on a single data point to better understand the nature of Shaanxi Jinye Science Technology and Education GroupLtd’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 that insiders are buying.

Valuation is complex, but we’re helping make it simple.

Find out whether Shaanxi Jinye Science Technology and Education GroupLtd is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.

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