The most recent earnings report from CCS Supply Chain Management Co., Ltd. (SHSE:600180) was disappointing for shareholders. While the headline numbers were soft, we believe that investors might be missing some encouraging factors.

How Do Unusual Items Influence Profit?

For anyone who wants to understand CCS Supply Chain Management's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by CN¥142m due to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. 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 CCS Supply Chain Management 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 CCS Supply Chain Management.

Our Take On CCS Supply Chain Management's Profit Performance

Because unusual items detracted from CCS Supply Chain Management's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Based on this observation, we consider it likely that CCS Supply Chain Management's statutory profit actually understates its earnings potential! Unfortunately, though, its earnings per share actually fell back over the last year. 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 CCS Supply Chain Management as a business, it's important to be aware of any risks it's facing. To help with this, we've discovered 4 warning signs (2 can't be ignored!) that you ought to be aware of before buying any shares in CCS Supply Chain Management.

This note has only looked at a single factor that sheds light on the nature of CCS 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 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.