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COFCO Engineering & Technology's (SZSE:301058) Shareholders May Want To Dig Deeper Than Statutory Profit

Simply Wall St ·  {{timeTz}}

COFCO Engineering & Technology Co., Ltd.'s (SZSE:301058) healthy profit numbers didn't contain any surprises for investors. However the statutory profit number doesn't tell the whole story, and we have found some factors which might be of concern to shareholders.

View our latest analysis for COFCO Engineering & Technology

earnings-and-revenue-historySZSE:301058 Earnings and Revenue History September 1st 2022

How Do Unusual Items Influence Profit?

Importantly, our data indicates that COFCO Engineering & Technology's profit received a boost of CN¥16m in unusual items, over the last year. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. Which is hardly surprising, given the name. If COFCO Engineering & Technology doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current year.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On COFCO Engineering & Technology's Profit Performance

Arguably, COFCO Engineering & Technology's statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that COFCO Engineering & Technology's true underlying earnings power is actually less than its statutory profit. But on the bright side, its earnings per share have grown at an extremely impressive rate 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. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. At Simply Wall St, we found 1 warning sign for COFCO Engineering & Technology and we think they deserve your attention.

This note has only looked at a single factor that sheds light on the nature of COFCO Engineering & Technology'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.

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.

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