The subdued market reaction suggests that Bondex Supply Chain Management Co., Ltd.'s (SHSE:603836) recent earnings didn't contain any surprises. We think that investors are worried about some weaknesses underlying the earnings.

The Impact Of Unusual Items On Profit

For anyone who wants to understand Bondex Supply Chain Management's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from CN¥92m worth of 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. Which is hardly surprising, given the name. We can see that Bondex Supply Chain Management's positive unusual items were quite significant relative to its profit in the year to December 2023. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Bondex Supply Chain Management.

Our Take On Bondex Supply Chain Management's Profit Performance

As we discussed above, we think the significant positive unusual item makes Bondex Supply Chain Management's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Bondex Supply Chain Management's underlying earnings power is lower than its statutory profit. In further bad news, its earnings per share decreased in the last year. 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 Bondex Supply Chain Management as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 2 warning signs for Bondex Supply Chain Management and you'll want to know about them.

This note has only looked at a single factor that sheds light on the nature of Bondex Supply Chain Management'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. 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.