Shareholders appeared unconcerned with Kingboard Holdings Limited's (HKG:148) lackluster earnings report last week. We think that the softer headline numbers might be getting counterbalanced by some positive underlying factors.
Check out our latest analysis for Kingboard HoldingsSEHK:148 Earnings and Revenue History September 22nd 2022
The Impact Of Unusual Items On Profit
For anyone who wants to understand Kingboard Holdings' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by HK$1.6b due 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. If Kingboard Holdings doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming 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 Kingboard Holdings' Profit Performance
Unusual items (expenses) detracted from Kingboard Holdings' earnings over the last year, but we might see an improvement next year. Because of this, we think Kingboard Holdings' earnings potential is at least as good as it seems, and maybe even better! Better yet, its EPS are growing strongly, which is nice to see. 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'd like to know more about Kingboard Holdings as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 1 warning sign for Kingboard Holdings and we think they deserve your attention.
This note has only looked at a single factor that sheds light on the nature of Kingboard Holdings' 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. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying to be useful.
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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.