Roundtop Machinery Industries Co., Ltd (1540) AI Stock Analysis

Roundtop Machinery Industries Co., Ltd

(TWSE:1540)

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Rating:59Neutral

Price Target:TWD 18.00▲(2.86% Upside)

Action:initiatedcoverage

Date:11/09/26

Roundtop Machinery scores in the middling range. Its greatest asset is an exceptionally conservative, virtually debt-free balance sheet combined with healthy operating margins above 20%, which sharply limits financial risk. However, this is offset by stalled revenue, a halving of reported net income, and a severe deterioration in cash generation, with free cash flow falling over 90% to under NT$9 million — the single biggest red flag. Technicals are weak, with the stock trading below all major moving averages and a negative MACD confirming a sustained downtrend. An inexpensive 14.1x P/E and a 5.8% dividend yield provide valuation support and income appeal, but the payout's durability depends on restoring cash conversion. Overall: a financially safe, low-beta value and income candidate currently held back by poor momentum and weak cash flow.

Positive Factors

Conservative Balance SheetThe company’s very low leverage and equity-heavy capital structure reduce financial risk through industry cycles. This provides flexibility to fund operations, withstand weaker demand, and pursue business needs without the burden of substantial debt service or refinancing pressure.

Negative Factors

Revenue ContractionDeclining revenue indicates that recent operating momentum has weakened and that the company is not currently expanding its top line. Continued contraction could reduce scale benefits, limit reinvestment capacity, and make future earnings growth more dependent on cost control.

Roundtop Machinery Industries Co., Ltd (1540) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 1.49B
Dividend Yield: 5.71%
Average Volume (3M): 128.08K
Price to Earnings (P/E): 14.3
Beta (1Y): 0.52
Revenue Growth: -11.52%
EPS Growth: 60.68%
Country: TW
Employees: 97
Sector: General
Sector Strength: 55
Industry: Industrial - Machinery

Roundtop Machinery Industries Co., Ltd Business Overview & Revenue Model

Company Description

Roundtop Machinery Industries Co., Ltd. specializes in the engineering and production of machine tools, catering to markets both in Taiwan and worldwide. Their comprehensive product lineup features a diverse array of machining centers, such as vertic...

Roundtop Machinery Industries Co., Ltd Financial Statement Overview

Summary

A fortress balance sheet (score 87) is the clear strength — the company is effectively debt-free with equity funding about 90% of assets, leaving minimal financial risk. Income statement quality is adequate (score 61), with gross margin above 33% and operating margin above 20%, though revenue has plateaued near NT$495 million and net income halved as prior-year non-operating gains rolled off. The weak point is cash flow (score 41): operating and free cash flow collapsed more than 90% to under NT$9 million, converting only about NT$0.09 per dollar of reported profit, pointing to working-capital strain. Returns are also modest, with ROE falling to 6.4% on a large, under-utilized equity base.

Income Statement

61Positive

Balance Sheet

87Very Positive

Cash Flow

41Neutral

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	406.94M	495.44M	498.10M	575.70M	473.29M	360.79M
Gross Profit	75.36M	165.46M	173.16M	184.55M	141.34M	58.31M
EBITDA	66.90M	108.23M	112.12M	124.04M	143.15M	3.51M
Net Income	104.54M	94.87M	180.95M	111.08M	108.14M	-3.62M
Balance Sheet
Total Assets	1.64B	1.64B	1.84B	1.72B	1.56B	1.52B
Cash, Cash Equivalents and Short-Term Investments	1.12B	1.02B	1.15B	1.07B	904.92M	847.70M
Total Debt	5.04M	8.50M	13.64M	10.01M	5.87M	36.12M
Total Liabilities	224.44M	161.12M	317.29M	285.74M	184.98M	229.11M
Stockholders Equity	1.41B	1.48B	1.52B	1.43B	1.37B	1.29B
Cash Flow
Free Cash Flow	132.53M	8.60M	106.42M	204.44M	87.19M	-39.90M
Operating Cash Flow	132.64M	8.74M	110.96M	207.30M	88.48M	-36.58M
Investing Cash Flow	-20.55M	-48.02M	335.72M	-303.70M	-471.25M	378.56M
Financing Cash Flow	-138.50M	-141.91M	-94.02M	-51.28M	-49.60M	-45.59M

Roundtop Machinery Industries Co., Ltd Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:1540 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:4568	74Outperform	TWD 1.57B	26.52	―	3.98%	0.83%	-19.72%
TW:4503	71Outperform	TWD 1.41B	4.85	―	―	-12.40%	1140.01%
TW:1541	64Neutral	TWD 1.52B	7.17	―	2.59%	-30.14%	21.52%
TW:1540	59Neutral	TWD 1.50B	14.34	―	5.71%	-11.52%	60.68%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:4543	53Neutral	TWD 1.46B	9.18	―	0.85%	15.97%	―
TW:1599	39Underperform	TWD 1.55B	-146.67	―	2.27%	-18.88%	-116.38%

* General Sector Average

Performance Comparison

TW:1540 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:1540	Roundtop Machinery Industries Co., Ltd	17.50	-4.06	-18.82%
TW:1541	Chang Type Industrial Co., Ltd.	19.30	-5.25	-21.38%
TW:1599	Aeontek Co Ltd	22.00	-4.33	-16.43%
TW:4503	Gold Rain Enterprises Corp.	18.05	-31.45	-63.54%
TW:4543	Man Zai Industrial Co., Ltd.	23.55	1.26	5.65%
TW:4568	Koge Micro Tech Co., Ltd.	49.70	9.19	22.69%

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

Roundtop Machinery Industries Co., Ltd AI Stock Analysis