Yung Chi Paint & Varnish Mfg Co., Ltd. (1726) AI Stock Analysis

Yung Chi Paint & Varnish Mfg Co., Ltd.

(TWSE:1726)

Select Model

Rating:72Outperform

Price Target:TWD 84.00▲(10.67% Upside)

Action:initiatedcoverage

Date:11/09/26

The score is anchored by a fortress-like financial profile: Yung Chi Paint is effectively debt-free, generates consistently stable margins, and posted record net income with a sharp free cash flow rebound in 2025. Valuation reinforces the case, with an undemanding 11.8x P/E and a near-5% dividend yield. Offsetting these strengths are limited growth and efficiency - revenue expands only in the low single digits, margins have drifted lower since 2020, return on equity has eased to the mid-8% range, and cash conversion is uneven across years. Technicals are the weakest element, with the stock trading below its short- and medium-term moving averages and a negative MACD signalling soft momentum, albeit with very low volatility. Overall, a low-risk, income-style holding with modest capital-appreciation potential.

Positive Factors

Very low leverageExtremely low leverage gives Yung Chi substantial financial flexibility and minimal refinancing exposure. The company can fund operations, reinvest in its coatings business, and potentially return capital without depending heavily on debt markets or taking on significant interest burden.

Negative Factors

Limited revenue growthA largely stagnant revenue base limits operating leverage and makes sustained earnings expansion harder to achieve. Without stronger demand or market-share gains, stable margins may preserve profitability but are less likely to produce meaningful long-term growth in earnings.

Yung Chi Paint & Varnish Mfg Co., Ltd. (1726) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 12.30B
Dividend Yield: 4.87%
Average Volume (3M): 26.88K
Price to Earnings (P/E): 12.5
Beta (1Y): 0.07
Revenue Growth: 1.61%
EPS Growth: 6.16%
Country: TW
Employees: 1,069
Sector: General
Sector Strength: 55
Industry: Chemicals - Specialty

Yung Chi Paint & Varnish Mfg Co., Ltd. Business Overview & Revenue Model

Company Description

Yung Chi Paint & Varnish Mfg.Co.,Ltd, founded in 1951 and based in Kaohsiung, Taiwan, is a prominent manufacturer and supplier of diverse coatings and paints, primarily serving the Taiwanese market. The company offers a comprehensive range of archite...

Yung Chi Paint & Varnish Mfg Co., Ltd. Financial Statement Overview

Summary

A financially sound, conservatively managed specialty chemicals maker. The balance sheet is the standout (score 88): essentially debt-free with just NT$48 million of debt against NT$10.4 billion of equity, which funds roughly 86% of assets. Earnings are stable (score 70) with record 2025 net income of NT$892 million and consistent margins, though revenue growth is only low-single-digit and margins have gradually compressed from 2020 levels. Cash flow (score 73) rebounded strongly in 2025 with free cash flow of NT$1.30 billion covering about 90% of net income, but remains lumpy year to year on working-capital swings. Return on equity near 8.5% reflects a conservative, under-leveraged capital base.

Income Statement

70Positive

Balance Sheet

88Very Positive

Cash Flow

73Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	9.94B	9.79B	9.53B	9.35B	9.74B	8.87B
Gross Profit	2.66B	2.47B	2.47B	2.34B	2.16B	2.24B
EBITDA	1.47B	1.32B	1.34B	1.26B	1.23B	1.22B
Net Income	1.04B	891.61M	856.05M	831.24M	814.47M	882.17M
Balance Sheet
Total Assets	12.93B	12.11B	11.85B	11.56B	11.42B	11.24B
Cash, Cash Equivalents and Short-Term Investments	3.66B	3.18B	2.59B	2.66B	1.89B	2.11B
Total Debt	50.91M	47.83M	73.26M	94.42M	76.13M	57.72M
Total Liabilities	2.35B	1.68B	1.58B	1.77B	1.84B	2.02B
Stockholders Equity	10.58B	10.43B	10.26B	9.79B	9.57B	9.22B
Cash Flow
Free Cash Flow	897.27M	1.30B	442.17M	1.41B	355.19M	-152.33M
Operating Cash Flow	993.14M	1.45B	593.22M	1.58B	580.64M	645.68M
Investing Cash Flow	355.58M	-80.00M	-838.12M	-519.78M	281.47M	-137.96M
Financing Cash Flow	-580.43M	-608.61M	-580.64M	-670.71M	-690.61M	-568.67M

Yung Chi Paint & Varnish Mfg Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:1726 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:1726	72Outperform	TWD 12.34B	12.46	―	4.87%	1.61%	6.16%
TW:1307	65Neutral	TWD 11.38B	8.46	―	7.76%	4.29%	-2.73%
TW:2108	64Neutral	TWD 13.32B	14.16	―	3.72%	12.61%	105.71%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:4707	45Neutral	TWD 11.15B	21.39	―	0.92%	-9.16%	67.21%
TW:4722	42Neutral	TWD 14.73B	46.70	―	0.84%	5.35%	71.97%
TW:1727	39Underperform	TWD 11.75B	121.53	―	0.18%	20.16%	962.24%

* General Sector Average

Performance Comparison

TW:1726 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:1726	Yung Chi Paint & Varnish Mfg Co., Ltd.	75.90	3.88	5.39%
TW:1307	San Fang Chemical Industry Co., Ltd.	28.35	-3.47	-10.89%
TW:1727	Chung Hwa Chemical Industrial Works Ltd.	84.10	47.51	129.83%
TW:2108	NANTEX INDUSTRY CO LTD	26.90	4.47	19.94%
TW:4707	Pan Asia Chemical Corp.	27.30	17.85	188.80%
TW:4722	Qualipoly Chemical Corp.	141.00	-30.34	-17.71%

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

Yung Chi Paint & Varnish Mfg Co., Ltd. AI Stock Analysis