Shares of Shanghai Electric Group Co., Ltd. (SH ELECTRIC) plummeted by a staggering 20.29% on November 7, 2024, despite the company's solid earnings report. This drastic sell-off was fueled by concerns raised over the sustainability of the company's reported profits.

According to an analysis by Simply Wall St, Shanghai Electric Group's statutory profit for the last twelve months was boosted by CN¥169 million worth of unusual items. These one-off items are typically non-recurring in nature, raising doubts about the company's ability to maintain its current level of profitability if such gains are absent in the future. (Source: Simply Wall St)

The article highlighted that the statutory earnings may not accurately reflect the underlying earnings power and ongoing productivity of Shanghai Electric Group due to the impact of these large unusual items. While the company managed to book a profit this year after losing money in the previous year, analysts and investors are questioning the sustainability and quality of its earnings, advising caution. (Source: Simply Wall St)