Formosa Chemicals & Fibre Corporation (1326) AI Stock Analysis

Formosa Chemicals & Fibre Corporation

(TWSE:1326)

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Rating:45Neutral

Price Target:TWD 61.00▼(-17.01% Downside)

Action:initiatedcoverage

Date:11/09/26

Formosa Chemicals & Fibre scores below average, driven primarily by a sharp earnings deterioration: falling revenue, a 3.2% gross margin, and a swing to operating and net losses that leave returns on a very large equity base negative. Its conservative capital structure (debt-to-equity of 0.37, equity funding about two-thirds of assets) and still-positive operating and free cash flow materially cushion the downside and make solvency risk low. Technicals add to the caution, with the price below its 20-, 50- and 100-day averages and negative MACD momentum, though the shares remain above the 200-day line. Valuation is also unsupportive, with a 28.2 P/E against loss-making earnings and a modest 0.96% yield. The investment case rests on a cyclical recovery in petrochemical spreads.

Positive Factors

Improved Balance SheetLower leverage reduces balance-sheet risk and gives the company greater flexibility to withstand cyclical weakness or fund operations. The sizeable equity base and manageable debt profile provide a more durable financial foundation despite currently depressed returns.

Negative Factors

Severe Profitability DeteriorationThe shift from strong double-digit net margins in 2020–2021 to a net loss in 2025 indicates a substantial decline in earnings power. Persistent weak profitability can constrain reinvestment, reduce returns on capital, and make recovery dependent on a durable improvement in operations.

Formosa Chemicals & Fibre Corporation (1326) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 425.81B
Dividend Yield: 0.82%
Average Volume (3M): 34.92M
Price to Earnings (P/E): 24.6
Beta (1Y): 0.86
Revenue Growth: 8.51%
EPS Growth: ―
Country: TW
Employees: 18,585
Sector: General
Sector Strength: 55
Industry: Chemicals

Formosa Chemicals & Fibre Corporation Business Overview & Revenue Model

Company Description

Founded in 1965 and headquartered in Taipei, Taiwan, Formosa Chemicals & Fibre Corporation operates as a multifaceted industrial enterprise with a significant presence both domestically and in international markets. Its primary activities encompass t...

Formosa Chemicals & Fibre Corporation Financial Statement Overview

Summary

A sturdy balance sheet is offsetting a severely weak earnings profile. Revenue has slid to roughly NT$287 billion in 2025 (-18% year over year), gross margin collapsed to 3.2%, and the company swung to an operating loss (-1.4% margin) and a net loss of about NT$5.8 billion, pushing return on equity to -1.7%. The offsets are meaningful: equity funds about 64% of the NT$539 billion asset base, debt-to-equity fell to a conservative 0.37, and operating cash flow improved to about NT$25 billion with free cash flow still positive at roughly NT$11 billion — evidence the loss is driven largely by depreciation rather than cash burn. Still, free cash flow fell about 25% and heavy capital spending absorbs over half of operating cash flow, leaving profitability dependent on a recovery in petrochemical spreads.

Income Statement

24Negative

Balance Sheet

68Positive

Cash Flow

57Neutral

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	303.48B	287.03B	348.61B	332.62B	379.90B	365.81B
Gross Profit	17.52B	9.33B	14.05B	11.42B	12.74B	53.44B
EBITDA	20.54B	10.99B	19.54B	27.87B	29.85B	56.63B
Net Income	13.82B	-5.80B	379.41M	8.55B	7.36B	38.36B
Balance Sheet
Total Assets	728.08B	538.94B	490.95B	565.87B	555.55B	598.35B
Cash, Cash Equivalents and Short-Term Investments	246.43B	121.45B	71.32B	123.95B	132.86B	145.37B
Total Debt	130.55B	128.58B	150.93B	146.74B	139.41B	103.69B
Total Liabilities	169.86B	157.84B	185.46B	182.18B	182.18B	154.36B
Stockholders Equity	518.86B	345.87B	272.55B	339.26B	326.13B	390.97B
Cash Flow
Free Cash Flow	1.06B	10.79B	6.73B	-2.42B	9.76B	22.57B
Operating Cash Flow	13.81B	25.10B	19.16B	18.36B	32.73B	38.73B
Investing Cash Flow	-2.46B	-5.78B	-14.83B	-28.62B	-28.87B	-24.16B
Financing Cash Flow	-16.43B	-26.38B	-5.25B	-238.32M	5.47B	-8.33B

Formosa Chemicals & Fibre Corporation Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:1326 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:1717	48Neutral	TWD 74.84B	33.16	―	1.58%	-1.57%	36.18%
TW:1605	47Neutral	TWD 149.34B	7.01	―	1.47%	-0.13%	1219.70%
TW:1326	45Neutral	TWD 418.20B	24.59	―	0.82%	8.51%	―
TW:1802	41Neutral	TWD 202.98B	45.12	―	―	11.76%	―
TW:1301	40Underperform	TWD 444.97B	42.80	―	0.71%	-11.04%	―
TW:2002	39Underperform	TWD 287.48B	776.86	―	0.80%	1.12%	―

* General Sector Average

Performance Comparison

TW:1326 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:1326	Formosa Chemicals & Fibre Corporation	73.50	38.30	108.82%
TW:1301	Formosa Plastics Corporation	70.20	27.95	66.16%
TW:1605	Walsin Lihwa Corporation	34.05	0.09	0.28%
TW:1717	Eternal Materials Co., Ltd.	63.00	23.49	59.47%
TW:1802	Taiwan Glass Industry Corp.	76.70	40.65	112.76%
TW:2002	China Steel Corporation	18.80	0.89	4.98%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Nov 09, 2026

Formosa Chemicals & Fibre Corporation AI Stock Analysis