Compal Electronics Inc

Compal maintains a debt-to-equity ratio of 0.88 and a current ratio of 1.3, indicating moderate leverage and acceptable short-term liquidity. However, the company's net cash position is negative after subtracting total debt, signaling potential liquidity constraints. Free cash flow of TWD 3.04 billion in the latest period suggests some capacity to fund operations and debt obligations, though capital expenditures of TWD 4.52 billion indicate ongoing investment in infrastructure.

Profitability metrics show a return on equity of 2.28% and a return on assets of 0.62%, both below the industry median for Computer Hardware firms. Gross profit of TWD 11.79 billion and operating income of TWD 4.06 billion reflect modest margins, consistent with the competitive pricing pressures in the ODM computer hardware sector. The company's net income of TWD 2.88 billion is in line with industry norms but does not suggest strong outperformance.

Geographically, Compal's revenue is heavily concentrated in the Asia-Pacific region, with a significant portion derived from its operations in China and Southeast Asia. The company's exposure to this region increases its vulnerability to geopolitical and supply chain disruptions. Segment-wise, the majority of revenue is generated from notebook computers, with desktops and peripherals contributing smaller shares. No material diversification across product lines is evident in the latest financials.

Looking ahead, Compal's revenue is projected to grow modestly, with analysts forecasting a mean price target of TWD 29.67 and a median of TWD 28.00. However, the absence of strong-buy ratings and the presence of six "hold" recommendations suggest limited upside potential in the near term. The company's capital expenditures and free cash flow suggest a balanced approach to growth and debt management, though the negative net cash position remains a concern.

Risk factors include liquidity constraints due to the negative net cash position and the potential for dilution if the company issues additional shares to fund operations or reduce debt. The risk assessment indicates a low probability of dilution in the near term, but the company's reliance on external financing could increase this risk if cash flow generation weakens. Analysts have not flagged any immediate regulatory or geopolitical risks, but the company's exposure to the Asia-Pacific region could become a concern if trade tensions or supply chain disruptions escalate.

Recent filings and transcripts show no material changes in the company's strategic direction or financial outlook. The company continues to focus on cost management and operational efficiency to maintain margins in a highly competitive market. No significant new product launches or market expansions were disclosed in the latest investor communications.

Operating income grew 23.2% year-over-year to TWD 14.8 billion in FY2025, demonstrating improved operational efficiency despite revenue declines.

Free cash flow surged to TWD 6.6 billion in FY2025, a significant improvement from the negative TWD 0.9 billion recorded in FY2023.

Long-term debt decreased by 36.1% over four years, falling from TWD 146.0 billion in FY2022 to TWD 92.3 billion in FY2026.

Cash conversion ratio of 1.96 exceeds the Computer Hardware cohort median of 1.0, indicating superior cash generation relative to earnings.

Gross profit expanded to TWD 45.4 billion in FY2025, up from TWD 40.4 billion in FY2023, suggesting margin resilience.

Free cash flow collapsed 90.4% year-over-year to just TWD 0.6 billion in FY2026, signaling a sharp deterioration in cash generation.

The company carries a high credit risk flag and a debt-to-equity ratio of 0.88, which is in the bottom quartile of its cohort.

Revenue TWD 201.30B, +1,1% YoY; Operating income −2,3% YoY.

• ▍Revenue TWD 201.30B, +1,1% YoY
• ▍Operating income −2,3% YoY
• ▍Net income −10,2% YoY
• ▍Free cash flow −43,5% YoY
• ▍Net margin 1.0%

Revenue TWD 190.85B, −16,7% YoY; Operating income −19,3% YoY.

• ▍Revenue TWD 190.85B, −16,7% YoY
• ▍Operating income −19,3% YoY
• ▍Net income −27,2% YoY
• ▍Free cash flow −107,1% YoY
• ▍Net margin 0.7%

Revenue TWD 187.12B, −23,4% YoY; Operating income −42,9% YoY.

• ▍Revenue TWD 187.12B, −23,4% YoY
• ▍Operating income −42,9% YoY
• ▍Net income −41,6% YoY
• ▍Free cash flow −12,3% YoY
• ▍Net margin 1.0%

Revenue TWD 180.44B, −23,9% YoY; Operating income −35,4% YoY.

• ▍Revenue TWD 180.44B, −23,9% YoY
• ▍Operating income −35,4% YoY
• ▍Net income −83,3% YoY
• ▍Free cash flow −63,7% YoY
• ▍Net margin 0.3%

Revenue TWD 199.10B; Operating income TWD 2.71B.

• ▍Revenue TWD 199.10B
• ▍Operating income TWD 2.71B
• ▍Net margin 1.1%

Revenue TWD 229.16B; Operating income TWD 3.27B.

• ▍Revenue TWD 229.16B
• ▍Operating income TWD 3.27B
• ▍Net margin 0.8%

Revenue TWD 244.32B; Operating income TWD 4.68B.

• ▍Revenue TWD 244.32B
• ▍Operating income TWD 4.68B
• ▍Net margin 1.4%

Revenue TWD 237.21B; Operating income TWD 4.06B.

• ▍Revenue TWD 237.21B
• ▍Operating income TWD 4.06B
• ▍Net margin 1.2%

Revenue TWD 757.51B, −16,8% YoY; Operating income −28,3% YoY.

• ▍Revenue TWD 757.51B, −16,8% YoY
• ▍Operating income −28,3% YoY
• ▍Net income −40,0% YoY
• ▍Free cash flow −90,4% YoY
• ▍Net margin 0.8%

Revenue TWD 910.25B, −3,9% YoY; Operating income +23,2% YoY.

• ▍Revenue TWD 910.25B, −3,9% YoY
• ▍Operating income +23,2% YoY
• ▍Net income +31,0% YoY
• ▍Free cash flow +48,7% YoY
• ▍Net margin 1.1%

Revenue TWD 946.71B, −11,8% YoY; Operating income +30,8% YoY.

• ▍Revenue TWD 946.71B, −11,8% YoY
• ▍Operating income +30,8% YoY
• ▍Net income +5,2% YoY
• ▍Free cash flow +604,3% YoY
• ▍Net margin 0.8%

Revenue TWD 1.07T, −13,2% YoY; Operating income −28,9% YoY.

• ▍Revenue TWD 1.07T, −13,2% YoY
• ▍Operating income −28,9% YoY
• ▍Net income −42,3% YoY
• ▍Free cash flow −190,7% YoY
• ▍Net margin 0.7%