Hai Kwang Enterprise Corporation (2038) AI Stock Analysis

Hai Kwang Enterprise Corporation

(TWSE:2038)

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Rating:39.25Underperform

Price Target:TWD 10.50▼(-4.55% Downside)

Action:initiatedcoverage

Date:11/10/26

The score is driven primarily by weak financial performance, including negative profitability and inconsistent cash generation. Bearish technical trends and an unfavorable negative-earnings valuation profile provide additional pressure, although the oversold indicators and positive equity offer limited support.

Positive Factors

Improved 2025 Cash GenerationThe 2025 rebound in operating cash flow and free cash flow provides internal funding capacity and demonstrates that cash generation can recover when operating conditions improve. This supports liquidity and investment flexibility, although consistency across the cycle remains important.

Negative Factors

Revenue and Profitability ContractionThe combination of declining revenue, a return to net losses, and very thin gross margin signals substantial pressure on demand, pricing, or costs. Persistently weak profitability would reduce reinvestment capacity and make earnings more vulnerable to further cyclical deterioration.

Hai Kwang Enterprise Corporation (2038) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 2.12B
Dividend Yield: ―
Average Volume (3M): 234.16K
Price to Earnings (P/E): -14.5
Beta (1Y): 0.53
Revenue Growth: -18.59%
EPS Growth: -845.11%
Country: TW
Employees: 369
Sector: General
Sector Strength: 55
Industry: Steel

Hai Kwang Enterprise Corporation Business Overview & Revenue Model

Company Description

Hai Kwang Enterprise Corporation, established in 1958, is based in Kaohsiung, Taiwan. This company specializes in the production, processing, commercial trading, and distribution of steel billets and bars throughout Taiwan.

Hai Kwang Enterprise Corporation Financial Statement Overview

Summary

Weak overall financial performance. The underlying income statement, balance sheet, and cash flow scores average 32.7 before applying the required 37-point minimum; declining revenue, negative profitability, high leverage, and volatile cash flow outweigh the support from positive equity and reduced debt.

Income Statement

20Very Negative

Balance Sheet

48Neutral

Cash Flow

30Negative

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	7.91B	8.92B	9.72B	9.37B	11.04B	10.23B
Gross Profit	16.37M	117.58M	240.52M	252.31M	309.07M	732.83M
EBITDA	122.18M	262.33M	466.24M	422.39M	560.03M	799.89M
Net Income	-148.72M	-109.05M	37.72M	53.32M	210.83M	459.71M
Balance Sheet
Total Assets	9.08B	9.65B	10.20B	9.45B	9.40B	8.98B
Cash, Cash Equivalents and Short-Term Investments	720.97M	563.97M	589.08M	418.21M	598.12M	592.09M
Total Debt	3.93B	4.64B	4.85B	4.21B	4.03B	3.42B
Total Liabilities	5.09B	5.66B	5.99B	5.49B	5.45B	5.07B
Stockholders Equity	3.81B	3.79B	3.98B	3.70B	3.65B	3.60B
Cash Flow
Free Cash Flow	629.91M	126.25M	-558.63M	-419.96M	-405.72M	604.42M
Operating Cash Flow	901.24M	374.43M	-292.36M	109.87M	45.67M	1.18B
Investing Cash Flow	-272.45M	-193.15M	-156.75M	-416.93M	-473.26M	-622.98M
Financing Cash Flow	-689.90M	-199.34M	658.93M	185.41M	342.31M	-255.00M

Hai Kwang Enterprise Corporation Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:2038 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:2032	57Neutral	TWD 2.11B	11.10	―	5.40%	0.82%	190.55%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:2065	53Neutral	TWD 2.15B	9.26	―	4.42%	8.17%	259.31%
TW:2066	49Neutral	TWD 2.08B	13.04	―	4.51%	-2.41%	82.10%
TW:2038	39Underperform	TWD 2.14B	-14.47	―	―	-18.59%	-845.11%
TW:2022	37Underperform	TWD 2.16B	-38.32	―	―	37.18%	71.66%
TW:2025	31Underperform	TWD 2.20B	8.35	―	―	46.75%	―

* General Sector Average

Performance Comparison

TW:2038 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:2038	Hai Kwang Enterprise Corporation	11.00	-3.10	-21.99%
TW:2022	Tycoons Group Enterprise Co., Ltd.	6.40	-1.51	-19.09%
TW:2025	Chien Shing Stainless Steel Co., Ltd.	10.85	2.09	23.82%
TW:2032	Sinkang Industries Co., Ltd.	16.20	2.56	18.80%
TW:2065	Sheh Fung Screws Co., Ltd.	33.90	6.13	22.07%
TW:2066	Sumeeko Industries Co., Ltd.	47.65	-0.88	-1.82%

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 10, 2026

Hai Kwang Enterprise Corporation AI Stock Analysis