Universal Microelectronics Co Ltd

Universal Microelectronics Co Ltd has a debt-to-equity ratio of 0.87, indicating a moderate reliance on debt financing, while its current ratio of 2.29 suggests it maintains sufficient short-term liquidity to cover its obligations. However, the company's free cash flow is negative at -4,975,000 TWD, and its operating cash flow is only 123,715,000 TWD, signaling potential challenges in generating sustainable cash from operations. The negative net cash position after subtracting total debt raises concerns about its liquidity risk.

The company's profitability is underperforming relative to industry norms, with a return on equity of -2.01% and a return on assets of -0.87%. These metrics indicate that the company is not generating returns that meet the cost of equity or assets, which is a red flag for investors. The operating income is negative at -78,876,000 TWD, and the net income is also negative at -39,640,000 TWD, further highlighting the company's financial distress.

Universal Microelectronics Co Ltd operates in a single business segment focused on semiconductor packaging and testing, with no disclosed geographic revenue breakdown. This lack of diversification increases its exposure to regional economic fluctuations and supply chain disruptions. The company's revenue concentration in a single product line and geographic market could amplify its vulnerability to industry-specific downturns.

The company's revenue for the latest period was 698,264,000 TWD, but the outlook for the current fiscal year is uncertain due to the negative operating and net income figures. The capital expenditure of -20,999,000 TWD suggests some investment in operations, but the negative free cash flow indicates that these investments are not yet generating positive returns. The company's growth trajectory appears to be constrained by its current financial performance and operational challenges.

The risk assessment highlights a medium liquidity risk and a low dilution risk. The negative net cash position after subtracting total debt is a key flag, indicating potential difficulties in meeting short-term obligations. The company has not disclosed any dilutive events in the near term, and the dilution risk is assessed as low. However, the negative operating and net income figures suggest that the company may need to raise additional capital in the future, which could lead to dilution.

Recent events, including the latest financial results, show a continued decline in profitability and cash flow generation. The company's last actual EPS was -0.40 TWD, and its last actual revenue was 3,653,501,000 TWD, both of which indicate a challenging operating environment. The company has not disclosed any significant strategic initiatives or operational improvements in recent filings or transcripts.

Net income surged 194.6% year-over-year in 2009, signaling a strong operational recovery from the previous fiscal year's losses.

Free cash flow increased by 336.8% year-over-year, demonstrating significantly improved cash generation capabilities in the latest period.

Long-term debt decreased to TWD 1.28 billion in 2009, reflecting a consistent downward trend in leverage over the past five years.

Operating income grew 112.9% year-over-year, indicating a substantial improvement in core business profitability compared to the prior year.

Revenue stabilized with a 3.5% year-over-year increase in 2009, halting the previous decline and suggesting potential top-line momentum.

The company carries a high credit risk flag, indicating significant concerns regarding its ability to meet financial obligations.

Debt-to-equity ratio of 0.87 is in the bottom quartile of peers, suggesting higher financial leverage than most competitors.

Revenue declined at a 4.6% compound annual growth rate over four years, indicating a long-term contraction in sales volume.

Revenue TWD 747.2M, +7,0% YoY; Operating income +64,1% YoY.

• ▍Revenue TWD 747.2M, +7,0% YoY
• ▍Operating income +64,1% YoY
• ▍Net income −253,1% YoY
• ▍Free cash flow −2 123,6% YoY
• ▍Net margin -18.7%

Revenue TWD 3.34B, +3,5% YoY; Operating income +112,9% YoY.

• ▍Revenue TWD 3.34B, +3,5% YoY
• ▍Operating income +112,9% YoY
• ▍Net income +194,6% YoY
• ▍Free cash flow +336,8% YoY
• ▍Net margin 1.6%

Revenue TWD 3.23B, −29,8% YoY; Operating income −321,8% YoY.

• ▍Revenue TWD 3.23B, −29,8% YoY
• ▍Operating income −321,8% YoY
• ▍Net income −152,1% YoY
• ▍Free cash flow −56,4% YoY
• ▍Net margin -1.7%

Revenue TWD 4.60B, −4,8% YoY; Operating income −66,8% YoY.

• ▍Revenue TWD 4.60B, −4,8% YoY
• ▍Operating income −66,8% YoY
• ▍Net income −59,5% YoY
• ▍Free cash flow −73,8% YoY
• ▍Net margin 2.3%

Revenue TWD 4.83B, +19,6% YoY; Operating income +252,9% YoY.

• ▍Revenue TWD 4.83B, +19,6% YoY
• ▍Operating income +252,9% YoY
• ▍Net income +487,3% YoY
• ▍Free cash flow +203,4% YoY
• ▍Net margin 5.4%

Revenue TWD 4.04B; Operating income TWD 72.9M.

• ▍Revenue TWD 4.04B
• ▍Operating income TWD 72.9M
• ▍Net margin 1.1%