Shenzhen Capol International & Associatesco.,Ltd's (SZSE:002949) healthy profit numbers didn't contain any surprises for investors. We think this is due to investors looking beyond the statutory profits and being concerned with what they see.

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Shenzhen Capol International & Associatesco.Ltd's profit received a boost of CN¥31m 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. And, after all, that's exactly what the accounting terminology implies. 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).

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 Shenzhen Capol International & Associatesco.Ltd's Profit Performance

Arguably, Shenzhen Capol International & Associatesco.Ltd's statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that Shenzhen Capol International & Associatesco.Ltd's true underlying earnings power is actually less than its statutory profit. But at least holders can take some solace from the 33% EPS growth in 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. If you want to do dive deeper into Shenzhen Capol International & Associatesco.Ltd, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 1 warning sign with Shenzhen Capol International & Associatesco.Ltd, and understanding it should be part of your investment process.

Today we've zoomed in on a single data point to better understand the nature of Shenzhen Capol International & Associatesco.Ltd'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. 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.