Advantech Co Ltd

Advantech maintains a conservative capital structure with a debt-to-equity ratio of 0.04 and a current ratio of 2.0, indicating strong liquidity and minimal leverage risk. The company's liquidity position is further supported by TWD 3.8 billion in cash and equivalents, which covers 140% of its short-term liabilities. Free cash flow of TWD 2.14 billion in the latest period reflects efficient working capital management and operational flexibility.

Profitability metrics show a return on equity of 4.61% and return on assets of 2.92%, both below the median for the Computer Hardware industry. Gross margin of 40.5% (TWD 5.93 billion gross profit on TWD 14.64 billion revenue) is in line with industry norms, but operating margin of 14.8% (TWD 2.17 billion operating income) suggests moderate cost control. Net income of TWD 2.11 billion represents 14.4% of revenue, consistent with the sector's average profitability.

Geographically, Advantech's revenue is concentrated in Asia (62% of total revenue), with North America and Europe accounting for 18% and 15% respectively. The company's largest product segment, industrial automation, contributes 58% of revenue, followed by embedded systems (27%) and smart city solutions (15%). This concentration in high-growth technology segments aligns with the industry's focus on digital transformation.

Revenue growth has been stable, with a 6.2% year-over-year increase in the latest fiscal year. Analysts project 4.8% revenue growth for the next fiscal year, driven by expansion in AIoT and edge computing markets. Free cash flow is expected to remain positive, supporting dividend sustainability and potential share repurchases.

Risk assessment indicates low liquidity and dilution risk, with no immediate filing-based flags detected. The company's low leverage and strong cash position mitigate refinancing risk. Dilution potential is minimal, as shares outstanding have remained unchanged at 868.25 million for both basic and diluted shares. No recent equity issuance or shelf registration activity has been reported.

Recent filings and transcripts show Advantech maintaining its focus on industrial AI and green technology initiatives. The company announced a new partnership with a major cloud provider to expand its edge computing solutions. No material regulatory or litigation risks were disclosed in the latest 10-K equivalent filing.

Analysts project 5.7% upside to a mean price target of TWD 490.45, reflecting positive market sentiment.

Free cash flow surged 663.1% year-over-year to TWD 1.44 billion in the latest fiscal period.

The firm maintains a conservative debt-to-equity ratio of 0.04, well below the 0.30 cohort median.

Net income dropped 16.2% year-over-year to TWD 9.0 billion in 2025, signaling weakening earnings momentum.

Cash conversion ratio of 0.68 is below the 1.0 median for the Computer Hardware cohort.

Return on equity of 4.6% remains modest despite best-in-class margins, suggesting capital efficiency challenges.

Long-term debt increased to TWD 2.15 billion in 2025, up from TWD 573 million in 2022.

Revenue TWD 20.39B, +17,5% YoY; Operating income +27,5% YoY.

• ▍Revenue TWD 20.39B, +17,5% YoY
• ▍Operating income +27,5% YoY
• ▍Net income +21,9% YoY
• ▍Free cash flow +25,9% YoY
• ▍Net margin 16.4%

Revenue TWD 17.92B, +9,8% YoY; Operating income +11,8% YoY.

• ▍Revenue TWD 17.92B, +9,8% YoY
• ▍Operating income +11,8% YoY
• ▍Net income +17,5% YoY
• ▍Free cash flow +22,7% YoY
• ▍Net margin 17.3%

Revenue TWD 17.77B, +18,9% YoY; Operating income +10,4% YoY.

• ▍Revenue TWD 17.77B, +18,9% YoY
• ▍Operating income +10,4% YoY
• ▍Net income +22,5% YoY
• ▍Free cash flow +12,9% YoY
• ▍Net margin 15.6%

Revenue TWD 17.84B, +21,8% YoY; Operating income +44,2% YoY.

• ▍Revenue TWD 17.84B, +21,8% YoY
• ▍Operating income +44,2% YoY
• ▍Net income −5,9% YoY
• ▍Free cash flow −26,4% YoY
• ▍Net margin 11.2%

Revenue TWD 17.35B; Operating income TWD 2.92B.

• ▍Revenue TWD 17.35B
• ▍Operating income TWD 2.92B
• ▍Net margin 15.8%

Revenue TWD 16.31B; Operating income TWD 2.51B.

• ▍Revenue TWD 16.31B
• ▍Operating income TWD 2.51B
• ▍Net margin 16.2%

Revenue TWD 14.95B; Operating income TWD 2.45B.

• ▍Revenue TWD 14.95B
• ▍Operating income TWD 2.45B
• ▍Net margin 15.1%

Revenue TWD 14.64B; Operating income TWD 2.17B.

• ▍Revenue TWD 14.64B
• ▍Operating income TWD 2.17B
• ▍Net margin 14.4%

Revenue TWD 70.88B, +18,6% YoY; Operating income +27,8% YoY.

• ▍Revenue TWD 70.88B, +18,6% YoY
• ▍Operating income +27,8% YoY
• ▍Net income +17,6% YoY
• ▍Free cash flow +663,1% YoY
• ▍Net margin 14.9%

Revenue TWD 59.79B, −7,4% YoY; Operating income −25,4% YoY.

• ▍Revenue TWD 59.79B, −7,4% YoY
• ▍Operating income −25,4% YoY
• ▍Net income −16,9% YoY
• ▍Free cash flow −93,3% YoY
• ▍Net margin 15.1%

Revenue TWD 64.57B, −6,1% YoY; Operating income −3,2% YoY.

• ▍Revenue TWD 64.57B, −6,1% YoY
• ▍Operating income −3,2% YoY
• ▍Net income +0,8% YoY
• ▍Free cash flow −31,9% YoY
• ▍Net margin 16.8%

Revenue TWD 68.74B, +17,3% YoY; Operating income +31,8% YoY.

• ▍Revenue TWD 68.74B, +17,3% YoY
• ▍Operating income +31,8% YoY
• ▍Net income +30,4% YoY
• ▍Free cash flow +52,8% YoY
• ▍Net margin 15.6%