Hsin Kuang Steel Co., Ltd. (2031) AI Stock Analysis

Hsin Kuang Steel Co., Ltd.

(TWSE:2031)

Select Model

Rating:58Neutral

Price Target:TWD 45.00▲(1.35% Upside)

Action:initiatedcoverage

Date:11/09/26

Hsin Kuang Steel scores in the middle of the range. The dominant factor is a mixed financial profile: strong, multi-year-high free cash flow and improved debt coverage are offset by falling net income and EBITDA despite higher revenue, single-digit margins, a third consecutive year of declining return on equity, and leverage of about 1.3x equity. Technically, the stock has rolled over below its short- and medium-term moving averages with a negative MACD, though deeply oversold RSI and Stochastic readings suggest the selling is extended. Supporting the score is a compelling valuation — a 6.9x P/E and a 5.8% dividend yield — which provides a cushion for patient, income-oriented investors, while cyclical steel-price exposure and earnings quality remain the key risks to monitor.

Positive Factors

Strong 2025 Cash GenerationThe sharp 2025 rebound in operating and free cash flow indicates that reported earnings converted into substantial internally generated funds. This supports ongoing operations, customer inventory needs, and capital allocation while reducing reliance on external financing during the next several quarters.

Negative Factors

Revenue and Margin PressureLower revenue and relatively thin margins reduce operating cushion and make earnings more sensitive to changes in steel demand, pricing, and customer activity. If this weaker profitability persists, the company may have less capacity to absorb cyclical pressure or fund expansion from operations.

Hsin Kuang Steel Co., Ltd. (2031) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 14.40B
Dividend Yield: 5.63%
Average Volume (3M): 899.42K
Price to Earnings (P/E): 6.1
Beta (1Y): 0.33
Revenue Growth: 1.16%
EPS Growth: 198.59%
Country: TW
Employees: 279
Sector: General
Sector Strength: 55
Industry: Steel

Hsin Kuang Steel Co., Ltd. Business Overview & Revenue Model

Company Description

Hsin Kuang Steel Company Limited, established in 1967 and headquartered in New Taipei City, Taiwan, operates primarily in the steel sector. Its core business involves the cutting, stamping, and distribution of a diverse range of steel products across...

Hsin Kuang Steel Co., Ltd. Financial Statement Overview

Summary

A mixed profile. Cash flow is the standout (score 65): operating cash flow nearly doubled to NT$2.20bn and free cash flow surged ~87% to a six-year high of NT$2.05bn, covering 93% of net income and lifting operating cash flow to ~25% of total debt. The income statement (54) is weaker — revenue rebounded to ~NT$16.8bn after two declining years, but net income fell to NT$1.06bn from NT$1.44bn, net margin compressed to 6.3%, EBITDA nearly halved, and net income exceeding operating profit points to reliance on non-operating gains. The balance sheet (56) is adequately capitalized with equity of NT$11.7bn funding ~41% of assets, but debt-to-equity of 1.26x is elevated and return on equity has fallen for a third straight year to 9.0%. Overall: a cash-generative but thin-margin, cyclical steel distributor with deteriorating profitability trends.

Income Statement

54Neutral

Balance Sheet

56Neutral

Cash Flow

65Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	16.56B	16.80B	14.59B	16.07B	17.16B	14.10B
Gross Profit	2.00B	1.46B	1.17B	1.45B	1.19B	3.12B
EBITDA	1.76B	1.19B	2.20B	2.48B	1.07B	3.43B
Net Income	2.07B	1.06B	1.44B	1.65B	393.56M	2.72B
Balance Sheet
Total Assets	31.18B	28.72B	29.55B	28.35B	24.44B	25.92B
Cash, Cash Equivalents and Short-Term Investments	6.84B	5.54B	4.96B	4.09B	2.88B	3.17B
Total Debt	16.12B	14.78B	15.58B	13.85B	13.05B	12.45B
Total Liabilities	18.48B	16.26B	17.20B	16.29B	14.36B	14.31B
Stockholders Equity	11.97B	11.74B	11.65B	11.34B	9.36B	10.89B
Cash Flow
Free Cash Flow	1.19B	2.05B	70.23M	-121.38M	982.42M	-228.05M
Operating Cash Flow	1.79B	2.20B	1.30B	349.87M	1.34B	515.79M
Investing Cash Flow	-726.70M	-116.82M	-1.27B	-649.07M	-512.68M	-1.12B
Financing Cash Flow	-1.09B	-2.09B	226.92M	154.13M	-694.93M	860.80M

Hsin Kuang Steel Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:2031 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:6581	76Outperform	TWD 12.07B	13.28	―	4.91%	5.53%	19.55%
TW:2010	73Outperform	TWD 14.96B	8.58	―	8.70%	1.76%	20.48%
TW:9930	69Neutral	TWD 14.27B	13.27	―	6.97%	-2.13%	-14.04%
TW:2031	58Neutral	TWD 14.26B	6.15	―	5.63%	1.16%	198.59%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:2009	44Neutral	TWD 12.10B	33.24	―	1.18%	14.59%	476.02%
TW:2034	44Neutral	TWD 12.51B	57.85	―	4.08%	-7.08%	―

* General Sector Average

Performance Comparison

TW:2031 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:2031	Hsin Kuang Steel Co., Ltd.	44.40	8.58	23.96%
TW:2009	First Copper Technology Co., Ltd.	34.00	-8.33	-19.69%
TW:2010	Chun Yuan Steel Industry Co., Ltd.	23.00	4.55	24.67%
TW:2034	YC Inox Co.,Ltd	24.50	5.89	31.67%
TW:6581	Taiwan Steel Union Co., Ltd.	108.00	4.18	4.03%
TW:9930	CHC Resources Corporation	57.40	-9.08	-13.65%

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

Hsin Kuang Steel Co., Ltd. AI Stock Analysis