Cathay Chemical Works Inc. (1713) AI Stock Analysis

Cathay Chemical Works Inc.

(TWSE:1713)

Select Model

Rating:57Neutral

Price Target:TWD 42.00▲(3.07% Upside)

Action:initiatedcoverage

Date:11/09/26

Cathay Chemical Works earns a middling score. The dominant issue is the quality of earnings: the core specialty chemicals business has generated operating losses for three consecutive years on shrinking revenue and a gross margin that has collapsed to roughly 4%, with headline profits coming from investment and asset gains rather than operations. Offsetting this is an exceptionally strong, effectively debt-free balance sheet where equity funds about 96% of assets, plus steady positive free cash flow and low capital intensity, which underpin staying power. Valuation support is meaningful — a single-digit P/E, a 7.7% dividend yield and a low beta of 0.33 — though the multiple and payout both lean on non-recurring gains. Technicals are the weakest near-term factor, with the price below all key moving averages and negative MACD, albeit at deeply oversold levels. A recovery in gross margin and a return to operating profitability would be the key catalysts for a higher score.

Positive Factors

Conservative Balance SheetMinimal leverage lowers solvency risk and gives Cathay Chemical greater flexibility during industry cycles. A strong equity and asset base can support continued operations, investment, and shareholder returns without relying heavily on additional borrowing.

Negative Factors

Volatile Revenue TrajectoryRepeated revenue declines make future operating momentum less predictable and indicate that demand or commercial execution has not been consistently expanding. Uneven sales performance can reduce utilization, weaken planning visibility, and make sustainable profit growth harder to achieve.

Cathay Chemical Works Inc. (1713) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 6.08B
Dividend Yield: 7.61%
Average Volume (3M): 239.83K
Price to Earnings (P/E): 8.6
Beta (1Y): 0.33
Revenue Growth: 2.77%
EPS Growth: -51.96%
Country: TW
Employees: 89
Sector: General
Sector Strength: 55
Industry: Chemicals - Specialty

Cathay Chemical Works Inc. Business Overview & Revenue Model

Company Description

Cathay Chemical Works Inc. manufactures and sells specialty and fine chemicals under the CATHAY brand in Taiwan. It provides sodium formaldehyde sulfoxylate, sodium metabisulfite, zinc oxide, calcined zinc oxide, sodium hydrosulfite, zinc dust, and s...

Cathay Chemical Works Inc. Financial Statement Overview

Summary

A debt-free, asset-rich balance sheet (score 85) is the clear strength — equity funds roughly 96% of assets and total debt is negligible, giving the company exceptional resilience. Cash flow is adequate (score 55), with four consecutive years of positive operating cash flow and NT$102.3 million of free cash flow on low capital spending. The weak link is the income statement (score 33): revenue has contracted over multiple years, gross margin collapsed to about 4%, and the core business has posted operating losses for three straight years. Reported net income of NT$583.8 million stems from non-operating investment and asset gains rather than chemical operations, making earnings lumpy, low-quality and not matched by cash generation.

Income Statement

33Negative

Balance Sheet

85Very Positive

Cash Flow

55Neutral

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	475.69M	460.04M	527.97M	476.39M	571.46M	624.60M
Gross Profit	33.18M	18.95M	63.98M	36.40M	63.22M	87.21M
EBITDA	159.79M	-62.95M	1.07B	363.74M	12.97M	174.42M
Net Income	715.21M	583.84M	1.56B	350.37M	285.91M	157.49M
Balance Sheet
Total Assets	4.29B	3.97B	4.57B	3.02B	2.75B	2.58B
Cash, Cash Equivalents and Short-Term Investments	297.24M	332.08M	1.36B	206.29M	262.71M	315.96M
Total Debt	5.18M	2.59M	4.78M	6.45M	8.50M	6.81M
Total Liabilities	611.73M	165.65M	222.79M	168.32M	164.89M	157.09M
Stockholders Equity	3.68B	3.81B	4.35B	2.85B	2.59B	2.43B
Cash Flow
Free Cash Flow	185.46M	102.27M	151.15M	99.67M	99.60M	-82.45M
Operating Cash Flow	194.10M	120.89M	157.29M	106.78M	110.74M	-75.18M
Investing Cash Flow	79.33M	972.39M	42.47M	18.73M	-30.99M	-90.98M
Financing Cash Flow	-1.13B	-1.13B	-212.54M	-153.08M	-128.61M	-99.63M

Cathay Chemical Works Inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:1713 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:6585	63Neutral	TWD 6.76B	10.51	―	4.81%	9.62%	46.90%
TW:1725	59Neutral	TWD 5.64B	10.49	―	3.47%	5.49%	83.25%
TW:1713	57Neutral	TWD 6.13B	8.58	―	7.61%	2.77%	-51.96%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:1809	47Neutral	TWD 7.27B	226.93	―	0.56%	3.90%	-23.90%
TW:1305	27Underperform	TWD 6.51B	-15.83	―	0.88%	-7.05%	63.06%

* General Sector Average

Performance Comparison

TW:1713 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:1713	Cathay Chemical Works Inc.	40.75	-1.47	-3.47%
TW:1305	China General Plastics Corporation	11.40	-0.26	-2.20%
TW:1725	Yuan Jen Enterprises Co., Ltd.	30.85	4.97	19.22%
TW:1809	China Glaze Co., Ltd.	44.50	24.63	123.90%
TW:6585	DingZing Advanced Materials, Inc.	93.50	-1.30	-1.37%
TW:6947	Techzone Technology Materials Co. Ltd.	62.80	-13.60	-17.80%

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

Cathay Chemical Works Inc. AI Stock Analysis