The subdued stock price reaction suggests that Yantai North Andre Juice Co.,Ltd.'s (HKG:2218) strong earnings didn't offer any surprises. We think that investors have missed some encouraging factors underlying the profit figures.
See our latest analysis for Yantai North Andre JuiceLtdrevenue -history" ftsrcwh="821x560" src="https://usnewsfile.futunn.com/pic/0-14335405-0-cc6d14697a8d58485df2ed8546c10de2.png/big"/>SEHK:2218 Earnings and Revenue History September 1st 2022
How Do Unusual Items Influence Profit?
To properly understand Yantai North Andre JuiceLtd's profit results, we need to consider the CN¥24m expense attributed to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. 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 Yantai North Andre JuiceLtd 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 Yantai North Andre JuiceLtd.
Our Take On Yantai North Andre JuiceLtd's Profit Performance
Unusual items (expenses) detracted from Yantai North Andre JuiceLtd's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Yantai North Andre JuiceLtd's statutory profit actually understates its earnings potential! Furthermore, it has done a great job growing EPS 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. While earnings are important, another area to consider is the balance sheet. You can see our latest analysis on Yantai North Andre JuiceLtd's balance sheet health here.
Today we've zoomed in on a single data point to better understand the nature of Yantai North Andre JuiceLtd's profit. But there are plenty of other ways to inform your opinion of a company. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.