Investors Can Find Comfort In Aseed HoldingsLtd's (TSE:9959) Earnings Quality

Simply Wall St · 07/01 22:42

The market for Aseed Holdings Co.,Ltd.'s (TSE:9959) shares didn't move much after it posted weak earnings recently. We did some digging, and we believe the earnings are stronger than they seem.

earnings-and-revenue-history
TSE:9959 Earnings and Revenue History July 1st 2025

How Do Unusual Items Influence Profit?

For anyone who wants to understand Aseed HoldingsLtd's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by JP¥125m 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. Assuming those unusual expenses don't come up again, we'd therefore expect Aseed HoldingsLtd 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 Aseed HoldingsLtd.

Our Take On Aseed HoldingsLtd's Profit Performance

Unusual items (expenses) detracted from Aseed HoldingsLtd's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Aseed HoldingsLtd's statutory profit actually understates its earnings potential! 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. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For instance, we've identified 3 warning signs for Aseed HoldingsLtd (1 makes us a bit uncomfortable) you should be familiar with.

This note has only looked at a single factor that sheds light on the nature of Aseed HoldingsLtd'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 with high insider ownership.