The subdued market reaction suggests that San Yang Ma (Chongqing) Logistics Co.,Ltd.'s (SZSE:001317) recent earnings didn't contain any surprises. Our analysis suggests that along with soft profit numbers, investors should be aware of some other underlying weaknesses in the numbers.
View our latest analysis for San Yang Ma (Chongqing) LogisticsLtd
The Impact Of Unusual Items On Profit
Importantly, our data indicates that San Yang Ma (Chongqing) LogisticsLtd's profit received a boost of CN¥5.8m in unusual items, over the last year. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And that's as you'd expect, given these boosts are described as 'unusual'. San Yang Ma (Chongqing) LogisticsLtd had a rather significant contribution from unusual items relative to its profit to June 2023. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of San Yang Ma (Chongqing) LogisticsLtd.
Our Take On San Yang Ma (Chongqing) LogisticsLtd's Profit Performance
As previously mentioned, San Yang Ma (Chongqing) LogisticsLtd's large boost from unusual items won't be there indefinitely, so its statutory earnings are probably a poor guide to its underlying profitability. As a result, we think it may well be the case that San Yang Ma (Chongqing) LogisticsLtd's underlying earnings power is lower than its statutory profit. Sadly, its EPS was down over the last twelve months. 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'd like to know more about San Yang Ma (Chongqing) LogisticsLtd as a business, it's important to be aware of any risks it's facing. To help with this, we've discovered 3 warning signs (1 is concerning!) that you ought to be aware of before buying any shares in San Yang Ma (Chongqing) LogisticsLtd.
This note has only looked at a single factor that sheds light on the nature of San Yang Ma (Chongqing) LogisticsLtd's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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.