Turn Cloud Technology Service Inc

Turn Cloud Technology Service Inc maintains a strong liquidity position with a current ratio of 3.87, indicating the company can cover its short-term liabilities more than three times over. However, the company reported negative operating cash flow of -38.6 million TWD, which raises concerns about its ability to sustain operations without external financing. The debt-to-equity ratio of 0.14 suggests a conservative capital structure, with limited leverage exposure.

Profitability metrics show mixed results. The company's return on equity (ROE) is 1.33%, and return on assets (ROA) is 0.98%, both below the typical thresholds for high-performing technology firms. The gross margin is 69.5%, which is relatively strong, but the operating margin is only 9.2%, indicating high operating expenses relative to revenue. The net profit margin of 9.9% is in line with industry norms, but the company's high price-to-earnings (P/E) ratio of 427.66 suggests that investors are paying a premium for earnings, which may not be sustainable.

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 downturns or regulatory changes. The company's revenue of 128.3 million TWD is modest compared to industry leaders, and there is no indication of significant international expansion.

Looking ahead, the company is expected to maintain a flat revenue trajectory, with no significant growth or contraction projected in the next fiscal year. The free cash flow of 15.04 million TWD is positive but insufficient to support aggressive reinvestment or shareholder returns. The company's capital expenditure of -546,000 TWD indicates minimal investment in physical assets, which is consistent with a software and IT services business model.

The risk assessment highlights liquidity as a medium concern, primarily due to the company's negative net cash position after accounting for total debt. The dilution risk is low, with no significant dilution expected in the near term. The company's high P/E ratio and low ROE suggest that investors may be overvaluing the company's earnings potential, which could lead to volatility if earnings fail to meet expectations.

Recent filings and transcripts do not indicate any major strategic shifts or operational disruptions. The company's strong analyst recommendation of 1.00 (strong buy) suggests confidence in its long-term prospects, but the low number of analysts covering the stock (1 strong buy, 0 buys, 0 holds, 0 sells, 0 strong sells) indicates limited institutional interest. The last actual EPS of 6.80 TWD was below the mean estimate of 9.08 TWD, which may signal underperformance relative to expectations.

Revenue grew 23.4% year-over-year to TWD 804.3 million in fiscal 2026, demonstrating strong top-line expansion momentum.

Net income surged 30.3% year-over-year to TWD 165.4 million in fiscal 2026, outpacing revenue growth significantly.

Debt-to-equity ratio of 0.14 is below the cohort median of 0.10, suggesting a conservative leverage profile.

Free cash flow turned sharply negative to TWD -388.6 million in fiscal 2026, signaling severe cash generation issues.

Long-term debt increased substantially to TWD 800.8 million in fiscal 2026, raising concerns about rising financial obligations.

The company carries a high credit risk flag, indicating significant potential for default or financial distress.

Return on equity of 1.3% falls below the Online Services cohort median of 3.5%, showing weak capital efficiency.

Cash conversion ratio of -3.03 is in the bottom quartile of the cohort, reflecting poor cash flow quality.

Revenue TWD 257.0M, +20,0% YoY; Operating income +6,2% YoY.

• ▍Revenue TWD 257.0M, +20,0% YoY
• ▍Operating income +6,2% YoY
• ▍Net income +16,3% YoY
• ▍Free cash flow +14,1% YoY
• ▍Net margin 24.5%

Revenue TWD 214.2M; Operating income TWD 64.0M.

• ▍Revenue TWD 214.2M
• ▍Operating income TWD 64.0M
• ▍Net margin 25.3%

Revenue TWD 181.7M; Operating income TWD 30.3M.

• ▍Revenue TWD 181.7M
• ▍Operating income TWD 30.3M
• ▍Net margin 16.4%

Revenue TWD 144.2M; Operating income TWD 18.4M.

• ▍Revenue TWD 144.2M
• ▍Operating income TWD 18.4M
• ▍Net margin 13.0%

Revenue TWD 128.3M; Operating income TWD 11.8M.

• ▍Revenue TWD 128.3M
• ▍Operating income TWD 11.8M
• ▍Net margin 9.9%

Revenue TWD 804.3M, +20,3% YoY; Operating income +54,6% YoY.

• ▍Revenue TWD 804.3M, +20,3% YoY
• ▍Operating income +54,6% YoY
• ▍Net income +43,3% YoY
• ▍Free cash flow −4 951,8% YoY
• ▍Net margin 20.6%

Revenue TWD 668.5M, +24,0% YoY; Operating income +54,8% YoY.

• ▍Revenue TWD 668.5M, +24,0% YoY
• ▍Operating income +54,8% YoY
• ▍Net income +42,4% YoY
• ▍Free cash flow +118,5% YoY
• ▍Net margin 17.3%

Revenue TWD 538.9M, +16,1% YoY; Operating income +64,2% YoY.

• ▍Revenue TWD 538.9M, +16,1% YoY
• ▍Operating income +64,2% YoY
• ▍Net income +27,0% YoY
• ▍Free cash flow −160,5% YoY
• ▍Net margin 15.0%