The stock was sluggish on the back of Shenzhen Mason Technologies Co.,Ltd's (SZSE:002654) recent earnings report. We have done some analysis, and found some encouraging factors that we believe the shareholders should consider.

How Do Unusual Items Influence Profit?

To properly understand Shenzhen Mason TechnologiesLtd's profit results, we need to consider the CN¥13m expense attributed 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. If Shenzhen Mason TechnologiesLtd doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Shenzhen Mason TechnologiesLtd.

Our Take On Shenzhen Mason TechnologiesLtd's Profit Performance

Because unusual items detracted from Shenzhen Mason TechnologiesLtd'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 Shenzhen Mason TechnologiesLtd's statutory profit actually understates its earnings potential! And one can definitely find a positive in the fact that it made a profit this year, despite losing money 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 want to do dive deeper into Shenzhen Mason TechnologiesLtd, you'd also look into what risks it is currently facing. At Simply Wall St, we found 2 warning signs for Shenzhen Mason TechnologiesLtd and we think they deserve your attention.

This note has only looked at a single factor that sheds light on the nature of Shenzhen Mason TechnologiesLtd'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 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.