Mega Fortune Co Ltd (MGRT)

Price$113.40Cached quoteAs of 2026-09-05 04:08 UTC

AI: Overvalued

Price checkThe market price demands growth far beyond the company’s proven earnings and cash generation.

Using 13.75 million shares and fiscal 2025 diluted earnings of $0.17, the observed price implies a market value near $1.66 billion, about 710 times annual earnings, 150 times revenue, and 107 times book equity. These calculations use the latest filed share count, so later issuance remains uncertain. Even assigning 50 times earnings—already a demanding growth valuation—would support only about 7% of the market value. That gap makes the shares overvalued on reported fundamentals.

Big pictureReported growth was exceptional, but profits did not turn into cash.

Fiscal 2025 revenue rose 233% to $11.09 million, while net income increased from $0.40 million to $1.79 million. However, operations consumed $12.00 million of cash, versus $0.10 million the previous year. Free cash flow—cash left after running and investing in the business—was also roughly negative $12 million because capital spending was negligible. A $4.4 million receivables increase and $11.3 million of advance payments explain most of the gap, making cash durability the central concern.

Business strengthHigh service margins support profits, while project and customer concentration make them fragile.

Gross profit reached $5.62 million and the operating margin improved to 20.3% from 16.4%. Support and maintenance revenue also climbed to $2.45 million from $0.43 million, providing a potentially repeatable service stream. However, project-based integration supplied 54% of revenue, and the five largest customers supplied 70%, up from 43%. Receivable-loss allowances reached $446,551, with $247,736 of bad debt written off. Large, short-duration customer projects therefore make revenue and collections potentially uneven.

What could change the storyCash collection could help, but poor capital use or dilution would deepen concern.

Current assets of $12.28 million comfortably exceeded current liabilities of $2.51 million, yet cash was only $0.76 million against $0.73 million of debt. Most reported asset strength instead rested on $6.24 million of receivables and about $11.30 million of current and long-term prepaid expenses. The public offering increased shares by 37.5% and raised $13.36 million net, while operations absorbed $12.00 million; no dividends or buybacks were reported. Positive operating cash flow and demonstrated benefits from those prepayments would strengthen the case, while further equity financing would weaken it.

AI: News

Controller ownership clarifiedA controlling investor disclosed greater ownership, leaving relatively few shares available for public trading.

On May 21, 2026, Power Partner Capital amended its ownership filing to report control of 10,625,237 shares, or 77.27% of the company. That total included 625,237 shares bought in the open market on October 22, 2025. The filing also confirmed that January’s purchase of Mericorn, which held 10 million company shares, cost $5.35 million. The stock fell 22.3% on the filing date, but timing alone does not establish that the disclosure caused the move.

Leadership team reshuffledSeveral board members and senior finance leaders departed shortly after the controlling-owner transaction.

An April 20, 2026 filing disclosed that two independent directors, the chief financial officer, and the chief operating officer had resigned on January 20–21. The company said the departures did not reflect disagreements. It appointed two replacement independent directors and named Long Wai Lai as director and finance chief. The breadth of the turnover matters because responsibility for financial oversight changed shortly after the controlling-owner transaction; the roughly three-month delay before public disclosure adds uncertainty about governance continuity.

Annual report exposed cash gapRapid sales and profit growth came with a much larger operating cash drain.

The February 3, 2026 annual report showed fiscal 2025 revenue of $11.09 million and net income of $1.79 million, compared with $3.33 million and $0.40 million respectively. At the same time, operations used $12.00 million, driven mainly by $11.3 million of advance payments and a $4.4 million receivables increase. The stock declined 5.2% on the filing date, but that timing does not prove the report caused the movement.

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Revenue

2022

2023

2024

2025

Net income

2022

2023

2024

2025

Free cash flow

2022

2023

2024

Total cash / debt

CashTotal debt

2022

2023

2024

2025

Financial statements

	2025	2024	2023	2022
Revenue	$11.1M	$3.3M	$3.2M	$3.5M
Gross profit	$5.6M	$1.8M	$1.3M	$955,784
Gross margin	50.67%	53.91%	39.26%	27.37%
Operating expenses	$3.4M	$1.2M	$722,364	$622,676
Operating income	$2.2M	$544,848	$552,546	$333,108
Operating margin	20.29%	16.38%	17.01%	9.54%
EBITDA	$2.3M	$549,699	$559,243	$387,226
EBITDA margin	20.32%	16.53%	17.22%	11.09%
Net income	$1.8M	$401,534	$536,554	$295,681
Net profit margin	16.13%	12.07%	16.52%	8.47%
Basic EPSper basic share	$0.17	$0.04	$0.05	$0.02
Diluted EPSper diluted share	$0.17	$0.04	$0.05	$0.02

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

Reported holdings Number of shares

View holders

Top 9 reported holders of MGRT
Holder	Shares held
Wang Chunyan Alice	632.43K
Lai Long Wai	465.4K
GEODE CAPITAL MANAGEMENT, LLC	11.96K
XTX Topco Ltd	4.35K
Quadrature Capital Ltd	4.18K
UBS Group AG	4K
MORGAN STANLEY	134
JPMORGAN CHASE & CO	75
Caitong International Asset Management Co., Ltd	1

Bars compare reported share counts. A matching total for this share class and reporting period is unavailable, so percentages are not shown.

Source: SEC Form 3 ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)0$0.00 disclosed value

No insider transactions transactions were reported in the stored SEC coverage.

Review ownership filings at SEC.gov ↗

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Mega Fortune Co Ltd (MGRT)

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