Zhongjin Irradiation Incorporated Company's (SZSE:300962) healthy profit numbers didn't contain any surprises for investors. We believe that shareholders have noticed some concerning factors beyond the statutory profit numbers.

See our latest analysis for Zhongjin Irradiation

The Impact Of Unusual Items On Profit

To properly understand Zhongjin Irradiation's profit results, we need to consider the CN¥8.5m gain attributed to unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. Which is hardly surprising, given the name. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is).

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Zhongjin Irradiation.

Our Take On Zhongjin Irradiation's Profit Performance

Arguably, Zhongjin Irradiation's statutory earnings have been distorted by unusual items boosting profit. Because of this, we think that it may be that Zhongjin Irradiation's statutory profits are better than its underlying earnings power. Nonetheless, it's still worth noting that its earnings per share have grown at 32% over the last three years. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. So while earnings quality is important, it's equally important to consider the risks facing Zhongjin Irradiation at this point in time. Case in point: We've spotted 2 warning signs for Zhongjin Irradiation you should be aware of.

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