Kimlun Corporation Berhad (KLSE:KIMLUN) Posted Healthy Earnings But There Are Some Other Factors To Be Aware Of

Kimlun Corporation Berhad (KLSE:KIMLUN) announced strong profits, but the stock was stagnant. Our analysis suggests that shareholders have noticed something concerning in the numbers.

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In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. In fact, Kimlun Corporation Berhad increased the number of shares on issue by 10.0% over the last twelve months by issuing new shares. That means its earnings are split among a greater number of shares. Per share metrics like EPS help us understand how much actual shareholders are benefitting from the company's profits, while the net income level gives us a better view of the company's absolute size. Check out Kimlun Corporation Berhad's historical EPS growth by clicking on this link.

A Look At The Impact Of Kimlun Corporation Berhad's Dilution On Its Earnings Per Share (EPS)

Three years ago, Kimlun Corporation Berhad lost money. On the bright side, in the last twelve months it grew profit by 78%. But EPS was less impressive, up only 78% in that time. And so, you can see quite clearly that dilution is influencing shareholder earnings.

In the long term, earnings per share growth should beget share price growth. So Kimlun Corporation Berhad shareholders will want to see that EPS figure continue to increase. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. For the ordinary retail shareholder, EPS is a great measure to check your hypothetical "share" of the company's profit.

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 Kimlun Corporation Berhad's Profit Performance

Kimlun Corporation Berhad shareholders should keep in mind how many new shares it is issuing, because, dilution clearly has the power to severely impact shareholder returns. Because of this, we think that it may be that Kimlun Corporation Berhad's statutory profits are better than its underlying earnings power. The good news is that, its earnings per share increased by 78% in the last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. If you want to do dive deeper into Kimlun Corporation Berhad, you'd also look into what risks it is currently facing. Case in point: We've spotted 1 warning sign for Kimlun Corporation Berhad you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of Kimlun Corporation 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. 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.

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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.