Earnings Troubles May Signal Larger Issues for Chin Hin Group Berhad (KLSE:CHINHIN) Shareholders
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KLSE:CHINHIN Earnings and Revenue History May 7th 2025
The Impact Of Unusual Items On Profit
For anyone who wants to understand Chin Hin Group Berhad's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from RM65m worth of unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. 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. We can see that Chin Hin Group Berhad's positive unusual items were quite significant relative to its profit in the year to December 2024. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Chin Hin Group Berhad.
Our Take On Chin Hin Group Berhad's Profit Performance
As previously mentioned, Chin Hin Group Berhad's large boost from unusual items won't be there indefinitely, so its statutory earnings are probably a poor guide to its underlying profitability. As a result, we think it may well be the case that Chin Hin Group Berhad's underlying earnings power is lower 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. So while earnings quality is important, it's equally important to consider the risks facing Chin Hin Group Berhad at this point in time. Every company has risks, and we've spotted 3 warning signs for Chin Hin Group Berhad (of which 1 is significant!) you should know about.
Today we've zoomed in on a single data point to better understand the nature of Chin Hin Group Berhad's profit. But there are plenty of other ways to inform your opinion of a company. 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 with significant insider holdings to be useful.
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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