Formosan Union Chemical Corp. (1709) AI Stock Analysis

Formosan Union Chemical Corp.

(TWSE:1709)

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Rating:57Neutral

Price Target:TWD 44.00▼(-12.18% Downside)

Action:initiatedcoverage

Date:11/09/26

Formosan Union Chemical scores modestly above the mid-range. Its greatest strength is financial resilience: very low leverage (debt-to-equity of 0.18), a steadily shrinking debt load and consistently positive free cash flow give it real downside protection through the chemicals cycle. Weighing against that are declining revenue (down about 13% to NT$9.0bn), a roughly 20% fall in net income, compressed margins and operating cash flow that nearly halved, alongside a soft 6.6% ROE. Technically, the stock retains a solid long-term uptrend above its 100- and 200-day averages but has recently corrected below its shorter-term averages with negative MACD and oversold stochastics. Valuation is the final drag — a 21.3x P/E on falling earnings leaves limited cushion, only partly offset by a 2.38% dividend yield.

Positive Factors

Low LeverageThe steady reduction in debt relative to equity gives Formosan Union Chemical greater resilience through chemical-industry cycles. Conservative leverage preserves borrowing capacity, reduces financial strain, and supports continued investment or shareholder returns without relying heavily on additional debt.

Negative Factors

Choppy Revenue TrendThe uneven revenue path indicates that demand and pricing conditions have not developed consistently. Repeated declines after a temporary rebound make forward growth less dependable and can limit operating leverage, investment capacity, and confidence in sustained expansion over coming quarters.

Formosan Union Chemical Corp. (1709) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 25.28B
Dividend Yield: 2.00%
Average Volume (3M): 22.79M
Price to Earnings (P/E): 25.1
Beta (1Y): 0.61
Revenue Growth: 13.74%
EPS Growth: 193.25%
Country: TW
Employees: 427
Sector: General
Sector Strength: 55
Industry: Chemicals - Specialty

Formosan Union Chemical Corp. Business Overview & Revenue Model

Company Description

Formosan Union Chemical Corp. (FUCC), established in 1973 and headquartered in Taipei, Taiwan, operates as a key producer and supplier of chemical products throughout the region. The company's core chemical offerings include: Alkyl benzene, which ser...

Formosan Union Chemical Corp. Financial Statement Overview

Summary

A conservatively financed but cyclically pressured business. The balance sheet is the clear strength (score 78): debt reduced from NT$2.67bn to NT$1.65bn, debt-to-equity of just 0.18, and equity of NT$8.95bn funding roughly three-quarters of assets — though ROE has slipped to 6.6% from 13.1% in 2022, signalling weak capital productivity. The income statement is softer (score 52): revenue fell about 13% to NT$9.0bn, net income dropped around 20% to NT$586m, and gross margin of 14.9% sits far below the 23.2% peak, even if it improved slightly year over year and operating profit held firm. Cash flow (score 58) is positive but weakening — operating cash flow nearly halved to NT$563m and free cash flow fell roughly 28% to NT$497m, albeit converting at a healthy 88% of net income on very light capex. Net: low financial risk, but no growth or earnings momentum.

Income Statement

52Neutral

Balance Sheet

78Positive

Cash Flow

58Neutral

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	9.31B	9.01B	10.30B	9.43B	10.57B	9.20B
Gross Profit	2.00B	1.34B	1.47B	1.16B	1.95B	2.14B
EBITDA	1.62B	888.70M	1.20B	799.60M	1.63B	1.25B
Net Income	958.07M	586.14M	733.58M	418.19M	1.08B	947.59M
Balance Sheet
Total Assets	12.34B	12.12B	12.78B	12.09B	13.27B	11.59B
Cash, Cash Equivalents and Short-Term Investments	1.18B	1.11B	601.16M	724.37M	1.57B	898.36M
Total Debt	1.01B	1.65B	1.91B	2.33B	2.67B	2.16B
Total Liabilities	3.09B	2.91B	3.44B	3.84B	4.72B	3.69B
Stockholders Equity	9.00B	8.95B	9.07B	7.99B	8.27B	7.62B
Cash Flow
Free Cash Flow	583.76M	496.68M	686.22M	737.06M	1.04B	495.64M
Operating Cash Flow	664.85M	563.30M	1.07B	796.34M	1.13B	609.79M
Investing Cash Flow	232.55M	248.53M	-245.30M	15.31M	-23.28M	-39.14M
Financing Cash Flow	-1.10B	-759.89M	-862.96M	-1.53B	-550.93M	-885.14M

Formosan Union Chemical Corp. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:1709 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:1723	63Neutral	TWD 16.23B	20.11	―	2.62%	7.82%	10.83%
TW:1714	60Neutral	TWD 15.46B	13.73	―	1.11%	48.25%	238.60%
TW:1709	57Neutral	TWD 21.75B	25.05	―	2.00%	13.74%	193.25%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:2103	50Neutral	TWD 19.40B	8.40	―	1.13%	9.79%	2185.39%
TW:1711	44Neutral	TWD 21.66B	270.82	―	0.80%	-2.22%	33.13%
TW:1312	30Underperform	TWD 19.04B	-3.05	―	―	40.97%	-18.15%

* General Sector Average

Performance Comparison

TW:1709 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:1709	Formosan Union Chemical Corp.	50.10	33.74	206.31%
TW:1312	Grand Pacific Petrochemical Corp.	12.55	1.55	14.09%
TW:1711	Everlight Chemical Industrial Corporation	37.40	18.46	97.50%
TW:1714	Ho Tung Chemical Corp.	16.20	7.85	94.04%
TW:1723	China Steel Chemical Corporation	70.60	-7.51	-9.61%
TW:2103	TSRC Corporation	23.85	9.29	63.79%

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

Formosan Union Chemical Corp. AI Stock Analysis