Taiwan Environment Scientific Co Ltd

Taiwan Environment Scientific Co Ltd maintains a conservative capital structure with a debt-to-equity ratio of 0.28, indicating a relatively low reliance on debt financing. The company's liquidity position is characterized as medium risk, with a current ratio of 3.41, suggesting it has sufficient short-term assets to cover its liabilities. However, the company's free cash flow of 42,559,000 TWD is modest relative to its operating cash flow of 170,625,000 TWD, indicating some constraints in cash generation after capital expenditures.

Profitability metrics show a return on equity of 2.19% and a return on assets of 1.45%, both below the industry median for Environmental Services & Equipment firms. This suggests the company is underperforming in terms of capital efficiency and asset utilization. Gross profit of 90,359,000 TWD represents 28.2% of revenue, which is in line with industry norms, but operating income of 55,218,000 TWD (17.2% of revenue) indicates some pressure on operating margins.

The company's revenue is concentrated in a single business segment, with no disclosed geographic diversification. This lack of diversification increases exposure to regional economic fluctuations and regulatory changes. The company's capital expenditures of -11,523,000 TWD suggest a reduction in investment in physical assets, which may impact long-term growth potential.

Looking ahead, the company's revenue outlook is mixed. The most recent actual revenue of 227,070,000 TWD is below the trailing twelve months' revenue of 320,423,000 TWD, indicating a potential decline in demand or pricing power. The company's net income of 42,601,000 TWD is also below the industry median, suggesting challenges in maintaining profitability.

The company's risk profile is moderate, with a low dilution risk and a medium liquidity risk. The risk assessment highlights a key flag: net cash is negative after subtracting total debt, which could constrain the company's ability to fund operations or invest in growth opportunities. No recent events or filings have been disclosed that would significantly alter the company's risk profile.

Cash conversion ratio of 4.01 is best-in-class compared to the 0.95 cohort median, highlighting exceptional cash generation capabilities.

Debt-to-equity ratio of 0.28 is lower than the 0.43 cohort median, suggesting a conservative capital structure with less leverage risk.

Free cash flow turned negative at -26.1 million TWD, reversing previous positive trends and raising concerns about liquidity sustainability.

Long-term debt surged to 1.97 billion TWD, nearly tripling from the prior year, increasing financial leverage and interest obligations.

The company faces high credit risk and medium liquidity risk, posing potential challenges for debt servicing and operational flexibility.

Revenue TWD 280.1M, −27,1% YoY; Operating income −37,8% YoY.

• ▍Revenue TWD 280.1M, −27,1% YoY
• ▍Operating income −37,8% YoY
• ▍Net income −85,1% YoY
• ▍Free cash flow −69,6% YoY
• ▍Net margin 6.1%

Revenue TWD 403.1M, −32,1% YoY; Operating income −76,1% YoY.

• ▍Revenue TWD 403.1M, −32,1% YoY
• ▍Operating income −76,1% YoY
• ▍Net income −76,5% YoY
• ▍Free cash flow −68,6% YoY
• ▍Net margin 10.1%

Revenue TWD 236.2M, −26,3% YoY; Operating income −55,8% YoY.

• ▍Revenue TWD 236.2M, −26,3% YoY
• ▍Operating income −55,8% YoY
• ▍Net income −55,7% YoY
• ▍Free cash flow −31,3% YoY
• ▍Net margin 8.0%

Revenue TWD 221.8M; Operating income -TWD 80.6M.

• ▍Revenue TWD 221.8M
• ▍Operating income -TWD 80.6M
• ▍Net margin -27.8%

Revenue TWD 384.2M; Operating income TWD 37.9M.

• ▍Revenue TWD 384.2M
• ▍Operating income TWD 37.9M
• ▍Net margin 30.0%

Revenue TWD 594.1M; Operating income TWD 227.6M.

• ▍Revenue TWD 594.1M
• ▍Operating income TWD 227.6M
• ▍Net margin 29.3%

Revenue TWD 320.4M; Operating income TWD 55.2M.

• ▍Revenue TWD 320.4M
• ▍Operating income TWD 55.2M
• ▍Net margin 13.3%

Revenue TWD 1.21B, −20,2% YoY; Operating income −54,2% YoY.

• ▍Revenue TWD 1.21B, −20,2% YoY
• ▍Operating income −54,2% YoY
• ▍Net income −68,6% YoY
• ▍Free cash flow −136,5% YoY
• ▍Net margin 7.0%

Revenue TWD 1.52B, −1,5% YoY; Operating income −39,9% YoY.

• ▍Revenue TWD 1.52B, −1,5% YoY
• ▍Operating income −39,9% YoY
• ▍Net income −25,5% YoY
• ▍Free cash flow −58,7% YoY
• ▍Net margin 17.8%