The subdued market reaction suggests that Zhejiang Haikong Nanke Huatie Digital Intelligence and Technology Co., Ltd.'s (SHSE:603300) 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.

The Impact Of Unusual Items On Profit

For anyone who wants to understand Zhejiang Haikong Nanke Huatie Digital Intelligence and Technology's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from CN¥173m 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. And that's as you'd expect, given these boosts are described as 'unusual'. If Zhejiang Haikong Nanke Huatie Digital Intelligence and Technology 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 Zhejiang Haikong Nanke Huatie Digital Intelligence and Technology's Profit Performance

Arguably, Zhejiang Haikong Nanke Huatie Digital Intelligence and Technology's statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that Zhejiang Haikong Nanke Huatie Digital Intelligence and Technology's true underlying earnings power is actually less than its statutory profit. But at least holders can take some solace from the 29% per annum growth in EPS for the last three. 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 Zhejiang Haikong Nanke Huatie Digital Intelligence and Technology, you'd also look into what risks it is currently facing. Case in point: We've spotted 2 warning signs for Zhejiang Haikong Nanke Huatie Digital Intelligence and Technology you should be mindful of and 1 of these bad boys is significant.

Today we've zoomed in on a single data point to better understand the nature of Zhejiang Haikong Nanke Huatie Digital Intelligence and Technology'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 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.