A lackluster earnings announcement from Chengdu Leejun Industrial Co., Ltd. (SZSE:002651) last week didn't sink the stock price. However, we believe that investors should be aware of some underlying factors which may be of concern.

See our latest analysis for Chengdu Leejun Industrial

Our Take On Chengdu Leejun Industrial's Profit Performance

Therefore, it seems possible to us that Chengdu Leejun Industrial's true underlying earnings power is actually less than its statutory profit. So while earnings quality is important, it's equally important to consider the risks facing Chengdu Leejun Industrial at this point in time. Case in point: We've spotted 1 warning sign for Chengdu Leejun Industrial you should be aware of.

In this article we've looked at a number of factors that can impair the utility of profit numbers, as a guide to a business. But there is always more to discover if you are capable of focussing your mind on minutiae. 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. 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.