Zeng Hsing Industrial Co., Ltd. (1558) AI Stock Analysis

Zeng Hsing Industrial Co., Ltd.

(TWSE:1558)

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Rating:64Neutral

Price Target:TWD 121.00▲(8.04% Upside)

Action:initiatedcoverage

Date:11/09/26

Zeng Hsing earns a moderate score. The dominant drag is deteriorating profitability: revenue declined 4.7%, operating margin fell from 14.7% to 9.0%, net income dropped about 19%, and return on equity slid to 7.1%, while debt-to-equity climbed to a five-year high of 0.49. Offsetting this, cash generation is strong and of high quality, with free cash flow up 24% to NT$915 million and operating cash flow more than triple net income, leaving the company far from financial stress. Technicals are supportive, with the price holding above all major moving averages in a well-defined uptrend, albeit with short-term momentum cooling. Valuation adds appeal through a modest 14.2x P/E and a 4.4% dividend yield, though that discount reflects genuine concerns over whether demand and margins can stabilise.

Positive Factors

OEM/ODM PositionThe OEM/ODM model gives Zeng Hsing an established role in the global appliance supply chain, combining product design and manufacturing capabilities. Serving international brands can support recurring commercial relationships and provide a platform for continued participation across household appliance categories.

Negative Factors

Revenue and Margin PressureThe reversal from strong 2024 growth to a 2025 revenue decline indicates that demand or business mix has weakened. Concurrent gross, operating, and net-margin pressure reduces earnings resilience and leaves less room to absorb further cost increases or continued softness in appliance markets.

Zeng Hsing Industrial Co., Ltd. (1558) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 7.32B
Dividend Yield: 4.46%
Average Volume (3M): 160.44K
Price to Earnings (P/E): 12.4
Beta (1Y): 0.10
Revenue Growth: 1.70%
EPS Growth: 62.07%
Country: TW
Employees: 3,615
Sector: General
Sector Strength: 55
Industry: Furnishings, Fixtures & Appliances

Zeng Hsing Industrial Co., Ltd. Business Overview & Revenue Model

Company Description

Zeng Hsing Industrial Co., Ltd., operating alongside its subsidiaries, specializes in the production and sale of a range of household goods and components. Primarily based in Taiwan, the company manufactures household sewing machines and their associ...

Zeng Hsing Industrial Co., Ltd. Financial Statement Overview

Summary

A mixed profile. The income statement is the weak link (score 44): revenue fell 4.7% to NT$8.1 billion, gross margin compressed to 26.9%, operating margin halved from 14.7% to 9.0%, and net income dropped about 19% to NT$366 million, well below 2020 levels, with volatile earnings suggesting limited pricing power. The balance sheet is adequate but softening (score 56): debt jumped to NT$2.54 billion, lifting debt-to-equity to a five-year high of 0.49, while return on equity eroded to 7.1% from 16.7% in 2020 — though leverage remains moderate and well covered by operating cash flow. Cash flow is the standout (score 71): operating cash flow of NT$1.24 billion was more than three times net income and free cash flow rose 24.2% to NT$915 million on lighter capital spending, pointing to high earnings quality despite lumpy year-to-year swings.

Income Statement

44Neutral

Balance Sheet

56Neutral

Cash Flow

71Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	8.10B	8.10B	8.34B	7.56B	7.20B	7.72B
Gross Profit	2.09B	2.18B	2.46B	1.92B	1.45B	1.59B
EBITDA	1.35B	1.38B	1.88B	1.42B	1.29B	1.01B
Net Income	518.19M	366.15M	453.19M	253.28M	491.32M	525.15M
Balance Sheet
Total Assets	14.18B	13.00B	13.14B	12.00B	12.55B	7.97B
Cash, Cash Equivalents and Short-Term Investments	4.03B	2.97B	2.83B	3.02B	3.22B	2.75B
Total Debt	2.68B	2.54B	1.70B	1.45B	2.32B	1.40B
Total Liabilities	5.49B	4.44B	4.06B	3.38B	4.33B	2.99B
Stockholders Equity	5.20B	5.17B	5.57B	5.35B	5.52B	4.91B
Cash Flow
Free Cash Flow	818.54M	915.49M	748.17M	2.08B	934.24M	194.37M
Operating Cash Flow	1.14B	1.24B	1.21B	2.20B	1.20B	568.23M
Investing Cash Flow	-1.26B	-450.61M	-1.50B	-628.16M	-894.64M	-472.90M
Financing Cash Flow	-498.56M	-281.57M	-336.41M	-1.56B	47.07M	-170.65M

Zeng Hsing Industrial Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:1558 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:8390	73Outperform	TWD 7.76B	8.53	―	4.82%	31.85%	50.37%
TW:4571	71Outperform	TWD 7.65B	16.61	―	3.53%	-0.89%	-0.66%
TW:1558	64Neutral	TWD 7.23B	12.43	―	4.46%	1.70%	62.07%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:6654	40Underperform	TWD 7.13B	78.33	―	―	115.72%	―

* General Sector Average

Performance Comparison

TW:1558 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:1558	Zeng Hsing Industrial Co., Ltd.	112.00	20.56	22.49%
TW:4565	Hong Wei Electrical Industry Co., Ltd.	120.00	13.38	12.55%
TW:4571	Khgears International Ltd.	149.50	-9.67	-6.08%
TW:6654	Tian Zheng International Precision Machinery Co., Ltd.	178.00	93.00	109.41%
TW:6990	Plum-Monix Industry Co Ltd	101.00	75.56	297.06%
TW:8390	Jiin Yeeh Ding Enterprise Co., Ltd.	78.80	13.31	20.32%

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

Zeng Hsing Industrial Co., Ltd. AI Stock Analysis