Formosa Taffeta Co., Ltd. (1434) AI Stock Analysis

Formosa Taffeta Co., Ltd.

(TWSE:1434)

Select Model

Rating:52Neutral

Price Target:TWD 17.50▼(-0.57% Downside)

Action:initiatedcoverage

Date:11/09/26

Formosa Taffeta scores in the lower-middle range, driven primarily by weak core earnings: revenue continues to contract, operating margin has fallen to 2.7%, net income nearly halved, and return on equity is only 2%, with profits partly dependent on investment income rather than manufacturing operations. These pressures are partially offset by a conservative balance sheet with falling debt and reliably positive free cash flow, which limit downside risk. Technicals add to caution, with the price below its 20-, 50- and 100-day averages and a negative MACD, although deeply oversold stochastic and RSI readings suggest a near-term bounce is possible. Valuation is unsupportive at a 19x P/E on depressed earnings, with the 2.9% dividend yield the main compensating factor. A re-rating would require a demand recovery and sustained improvement in operating margins.

Positive Factors

Conservative LeverageConservative leverage reduces the company’s exposure to financing stress and preserves flexibility through operating downturns. With debt modest relative to equity, Formosa Taffeta has greater capacity to sustain operations and allocate capital without excessive balance-sheet pressure.

Negative Factors

Revenue ContractionFlat-to-declining revenue points to limited near-term expansion in the existing business and may constrain operating leverage. If demand remains subdued, the company could have less ability to spread fixed costs, invest for growth, or rebuild earnings momentum.

Formosa Taffeta Co., Ltd. (1434) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 29.28B
Dividend Yield: 2.84%
Average Volume (3M): 2.66M
Price to Earnings (P/E): 18.9
Beta (1Y): 0.31
Revenue Growth: -6.35%
EPS Growth: 147.91%
Country: TW
Employees: 6,914
Sector: General
Sector Strength: 55
Industry: Manufacturing - Textiles

Formosa Taffeta Co., Ltd. Business Overview & Revenue Model

Company Description

Formosa Taffeta Co., Ltd. operates in the textile industry in Taiwan and Asia. The company offers eco-friendly, sports and outdoor, safety, and lifestyle fabrics. It also offers umbrella, carbon fiber, spun yarn, tire cord, and PE plastic bags. In ad...

Formosa Taffeta Co., Ltd. Financial Statement Overview

Summary

A solid balance sheet (score 70) with low leverage (debt-to-equity 0.26, down from 0.31) and a large NT$42.3bn equity base provides meaningful downside protection, while cash flow (score 62) remains positive with NT$2.54bn operating and NT$1.78bn free cash flow. The weak link is the income statement (score 44): revenue of NT$27.5bn fell 2.6% and sits ~21% below the 2022 peak, operating margin compressed to 2.7% from 6.7%, net income dropped 42% to NT$865mn, and return on equity is just 2.0%. Earnings quality is further clouded by reliance on non-operating investment income, and both operating and free cash flow are in a multi-year downtrend.

Income Statement

44Neutral

Balance Sheet

70Positive

Cash Flow

62Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	26.82B	27.54B	28.72B	28.50B	34.72B	32.80B
Gross Profit	2.96B	3.08B	3.07B	2.53B	3.77B	4.17B
EBITDA	2.03B	2.04B	3.31B	1.66B	4.71B	2.90B
Net Income	1.55B	865.25M	1.49B	444.55M	3.40B	2.14B
Balance Sheet
Total Assets	64.31B	57.14B	52.36B	71.66B	75.41B	81.34B
Cash, Cash Equivalents and Short-Term Investments	5.46B	4.11B	4.34B	5.47B	6.55B	5.02B
Total Debt	11.11B	11.20B	11.51B	13.57B	14.83B	14.54B
Total Liabilities	15.65B	14.80B	15.45B	17.31B	19.64B	19.10B
Stockholders Equity	48.66B	42.34B	36.91B	54.35B	55.77B	62.24B
Cash Flow
Free Cash Flow	1.51B	1.78B	2.72B	3.41B	2.77B	1.96B
Operating Cash Flow	2.42B	2.54B	3.31B	4.09B	3.62B	2.43B
Investing Cash Flow	-1.13B	-817.84M	-874.30M	-1.36B	-909.16M	-689.51M
Financing Cash Flow	-1.30B	-1.85B	-3.25B	-3.92B	-1.04B	-1.33B

Formosa Taffeta Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:1434 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:6890	66Neutral	TWD 35.04B	13.28	―	6.41%	-6.82%	-24.69%
TW:6191	63Neutral	TWD 41.64B	14.41	―	3.11%	38.15%	-5.47%
TW:1409	57Neutral	TWD 36.07B	10.21	―	4.03%	-7.23%	195.60%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:1434	52Neutral	TWD 29.61B	18.92	―	2.84%	-6.35%	147.91%
TW:1440	45Neutral	TWD 20.96B	146.41	―	2.37%	-12.69%	―
TW:3715	40Underperform	TWD 33.75B	-105.26	―	0.91%	42.69%	-137.96%

* General Sector Average

Performance Comparison

TW:1434 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:1434	Formosa Taffeta Co., Ltd.	17.60	1.52	9.47%
TW:1409	Shinkong Synthetic Fibers Corporation	22.35	7.61	51.58%
TW:1440	Tainan Spinning Co., Ltd.	12.65	-1.38	-9.83%
TW:3715	Dynamic Holding Co Ltd	119.00	-10.46	-8.08%
TW:6191	Global Brands Manufacture Limited	83.70	-35.78	-29.95%
TW:6890	Lai Yih Footwear Co., Ltd.	140.00	-94.81	-40.38%

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 Taffeta Co., Ltd. AI Stock Analysis