Key Ware Electronics Co Ltd

Key Ware Electronics has a market price of 70.3 TWD per share, with a market capitalization of 13.6 billion TWD. The company's price-to-book ratio is 6.32, and its price-to-tangible-book ratio is also 6.32, indicating a premium valuation relative to its book value. The enterprise value to EBITDA ratio is negative at -2,594.11, reflecting the company's current operating losses. The enterprise value to revenue ratio is 47.49, suggesting a high valuation relative to its revenue.

The company's profitability metrics are concerning. The return on equity is -0.37%, and the return on assets is -0.2%, both significantly below industry norms. The operating income is negative at -5.77 million TWD, and the net income is also negative at -7.97 million TWD. These figures indicate that the company is not generating sufficient revenue to cover its operating costs and is experiencing a decline in profitability.

Key Ware Electronics' revenue is concentrated in a few key markets, with the majority of its sales coming from the manufacturing and construction sectors. The company's geographic exposure is primarily in Asia, with a significant portion of its revenue derived from domestic operations. This concentration increases the company's vulnerability to regional economic downturns and shifts in demand.

The company's growth trajectory is mixed. While the company has a free cash flow of 23.32 million TWD, indicating some operational flexibility, the operating cash flow is negative at -79.19 million TWD. The capital expenditure of -5.198 million TWD suggests that the company is investing in its operations, but the negative operating cash flow raises concerns about its ability to sustain these investments. The company's revenue has shown a decline in recent periods, and the outlook for the next fiscal year is uncertain.

The risk assessment for Key Ware Electronics highlights several key issues. The company's liquidity is rated as medium, with a current ratio of 1.91, indicating that it has enough current assets to cover its current liabilities. However, the debt-to-equity ratio is 0.63, suggesting a moderate level of leverage. The company's net cash position is negative after subtracting total debt, which increases its financial risk. The dilution risk is rated as low, with no significant dilution expected in the near term.

Recent events and filings indicate that the company is facing challenges in maintaining profitability. The negative operating income and net income suggest that the company is struggling to generate sufficient revenue to cover its costs. The company's management has not disclosed any significant strategic initiatives or cost-cutting measures to address these issues. The lack of positive developments in recent filings and transcripts raises concerns about the company's ability to improve its financial performance.

Revenue grew 21.0% year-over-year to TWD 1.41 billion, demonstrating strong top-line expansion momentum.

Free cash flow surged 151.7% to TWD 119.3 million, indicating significantly improved cash generation capabilities.

Cash conversion ratio of 9.93 ranks best-in-class, far exceeding the cohort median of 0.95.

Gross profit expanded to TWD 153.3 million, reflecting improved pricing power or cost management efficiency.

Long-term debt decreased slightly to TWD 1.33 billion, suggesting a modest reduction in leverage pressure.

Net margin of -2.53% places the company in the bottom quartile of its industrial machinery cohort.

Return on equity of -0.37% significantly underperforms the cohort median of 3.56%, indicating poor capital efficiency.

The company faces high credit risk, signaling potential difficulties in meeting financial obligations or securing financing.

Debt-to-equity ratio of 0.63 is substantially higher than the cohort median of 0.20, indicating elevated leverage.

Revenue TWD 1.45B, −7,9% YoY; Operating income −445,6% YoY.

• ▍Revenue TWD 1.45B, −7,9% YoY
• ▍Operating income −445,6% YoY
• ▍Net income −91,6% YoY
• ▍Free cash flow +47,6% YoY
• ▍Net margin 0.2%