Mayu Global Group Berhad's (KLSE:MAYU) Shareholders Have More To Worry About Than Lackluster Earnings

Mayu Global Group Berhad's (KLSE:MAYU) stock wasn't much affected by its recent lackluster earnings numbers. We did some digging, and we believe that investors are missing some worrying factors underlying the profit figures.

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One essential aspect of assessing earnings quality is to look at how much a company is diluting shareholders. Mayu Global Group Berhad expanded the number of shares on issue by 8.7% over the last year. As a result, its net income is now split between 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 Mayu Global Group Berhad's historical EPS growth by clicking on this link.

A Look At The Impact Of Mayu Global Group Berhad's Dilution On Its Earnings Per Share (EPS)

As you can see above, Mayu Global Group Berhad has been growing its net income over the last few years, with an annualized gain of 107% over three years. In contrast, earnings per share were actually down by 8.5% per year, in the exact same period. Net income was down 12% over the last twelve months. Unfortunately for shareholders, though, the earnings per share result was even worse, declining 13%. So you can see that the dilution has had a bit of an impact on shareholders.

If Mayu Global Group Berhad's EPS can grow over time then that drastically improves the chances of the share price moving in the same direction. 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.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Mayu Global Group Berhad.

How Do Unusual Items Influence Profit?

Alongside that dilution, it's also important to note that Mayu Global Group Berhad's profit was boosted by unusual items worth RM7.4m in the last twelve months. 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 crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And that's as you'd expect, given these boosts are described as 'unusual'. Mayu Global Group Berhad had a rather significant contribution from unusual items relative to its profit to March 2025. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.

Our Take On Mayu Global Group Berhad's Profit Performance

To sum it all up, Mayu Global Group Berhad got a nice boost to profit from unusual items; without that, its statutory results would have looked worse. And furthermore, it went and issued plenty of new shares, ensuring that each shareholder (who did not tip more money in) now owns a smaller proportion of the company. For the reasons mentioned above, we think that a perfunctory glance at Mayu Global Group Berhad's statutory profits might make it look better than it really is on an underlying level. If you want to do dive deeper into Mayu Global Group Berhad, you'd also look into what risks it is currently facing. At Simply Wall St, we found 3 warning signs for Mayu Global Group Berhad and we think they deserve your attention.

In this article we've looked at a number of factors that can impair the utility of profit numbers, and we've come away cautious. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. 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.