Ningbo Shuanglin Auto Parts Co.,Ltd. (SZSE:300100) just reported healthy earnings but the stock price didn't move much. Our analysis suggests that investors might be missing some promising details.

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Ningbo Shuanglin Auto PartsLtd's profit was reduced by CN¥71m, 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. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. Assuming those unusual expenses don't come up again, we'd therefore expect Ningbo Shuanglin Auto PartsLtd 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 Ningbo Shuanglin Auto PartsLtd.

Our Take On Ningbo Shuanglin Auto PartsLtd's Profit Performance

Because unusual items detracted from Ningbo Shuanglin Auto PartsLtd's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Ningbo Shuanglin Auto PartsLtd's earnings potential is at least as good as it seems, and maybe even better! 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. If you'd like to know more about Ningbo Shuanglin Auto PartsLtd as a business, it's important to be aware of any risks it's facing. For example - Ningbo Shuanglin Auto PartsLtd has 2 warning signs we think you should be aware of.

This note has only looked at a single factor that sheds light on the nature of Ningbo Shuanglin Auto PartsLtd's profit. But there are plenty of other ways to inform your opinion of a company. 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. 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 with significant insider holdings 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.