JDM JingDaMachine (Ningbo) Co.Ltd's (SHSE:603088) healthy profit numbers didn't contain any surprises for investors. However the statutory profit number doesn't tell the whole story, and we have found some factors which might be of concern to shareholders.

The Impact Of Unusual Items On Profit

Importantly, our data indicates that JDM JingDaMachine (Ningbo)Ltd's profit received a boost of CN¥14m in unusual items, over the last year. 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 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 JDM JingDaMachine (Ningbo)Ltd doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current year.

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 JDM JingDaMachine (Ningbo)Ltd's Profit Performance

Arguably, JDM JingDaMachine (Ningbo)Ltd's statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that JDM JingDaMachine (Ningbo)Ltd's true underlying earnings power is actually less than its statutory profit. But on the bright side, 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. If you want to do dive deeper into JDM JingDaMachine (Ningbo)Ltd, you'd also look into what risks it is currently facing. For example - JDM JingDaMachine (Ningbo)Ltd has 1 warning sign we think you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of JDM JingDaMachine (Ningbo)Ltd'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 with high insider ownership.

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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.