Formosa Plastics Corp

Formosa Plastics Corp's capital structure shows a debt-to-equity ratio of 0.36, indicating a relatively conservative leverage position compared to the industry median of 0.45. The company's liquidity position is medium risk, with cash and equivalents of TWD 9.55 billion and negative free cash flow of TWD -17.19 billion. The negative free cash flow is driven by capital expenditures of TWD -14.56 billion, which is higher than the industry median of TWD -10.2 billion. Profitability metrics show significant underperformance relative to the industry. Return on equity is -2.77%, far below the industry median of 8.2%, and return on assets is -1.8%, compared to the median of 5.1%. The company reported a net loss of TWD -10.05 billion and an operating loss of TWD -7.51 billion, which is a sharp decline from the prior year's operating income of TWD 12.3 billion. The company's revenue is distributed across eight segments, with no single segment accounting for more than 20% of total revenue. The Plastic division contributes the largest share, followed by Polyolefin and Polypropylene. Geographically, the company is heavily concentrated in Taiwan, with over 85% of revenue derived from domestic operations. This concentration increases exposure to local economic and regulatory risks. Growth trajectory is negative, with the current fiscal year expected to show a revenue decline of 12% year-over-year. The next fiscal year is projected to see a further decline of 5%, driven by weak demand in the chemical sector and high input costs. The company's operating cash flow of TWD 6.62 billion is insufficient to cover capital expenditures, indicating a need for external financing. Risk factors include liquidity constraints and the potential for dilution. The company has a low dilution risk, with no significant share issuance expected in the near term. However, the negative free cash flow and high capital expenditures increase the risk of future dilution if the company needs to raise additional capital. The risk assessment indicates a medium liquidity risk, with net cash being negative after subtracting total debt. Recent events include a 10-K filing that highlights the impact of global economic conditions on demand for chemical products. The company also issued a press release regarding cost-cutting measures to improve profitability. Analysts have a mixed outlook, with a mean recommendation of 2.38 (1=strong buy, 5=strong sell) and a mean price target of TWD 62.33.