China Motor Corporation (2204) AI Stock Analysis

China Motor Corporation

(TWSE:2204)

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Rating:60Neutral

Price Target:TWD 54.00▲(4.65% Upside)

Action:initiatedcoverage

Date:11/09/26

China Motor earns a moderate score. The dominant factor is its financial profile: an exceptionally conservative, low-leverage balance sheet and stable gross margins are offset by an 18% revenue decline, two straight years of falling profits, halved return on equity, weak cash conversion and negative free cash flow alongside a sharp rise in borrowings. Valuation provides meaningful support, with a low 8.35 P/E and a near 7% dividend yield, though payout sustainability warrants monitoring given the cash burn. Technicals are the weakest near-term element, with the price below all key moving averages and soft momentum, albeit with the Stochastic nearing oversold levels and very low volatility. Overall, this is a well-capitalized, income-oriented holding whose re-rating depends on a recovery in sales and cash flow.

Positive Factors

Conservative Balance SheetLow leverage gives China Motor financial flexibility to withstand cyclical automotive demand and continue investing without relying heavily on borrowing. A sizable equity base also reduces balance-sheet fragility, supporting resilience through weaker operating periods and preserving capital-allocation options.

Negative Factors

Weak Recent Cash ConversionRecent profits have not translated into comparable cash generation, with operating cash flow low relative to earnings and free cash flow negative. If this persists, China Motor may have less internally generated funding for investment, dividends, or debt reduction and could face greater working-capital pressure.

China Motor Corporation (2204) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 28.23B
Dividend Yield: 6.98%
Average Volume (3M): 841.70K
Price to Earnings (P/E): 8.3
Beta (1Y): 0.10
Revenue Growth: 10.21%
EPS Growth: 12.47%
Country: TW
Employees: 2,814
Sector: General
Sector Strength: 55
Industry: Auto - Manufacturers

China Motor Corporation Business Overview & Revenue Model

Company Description

Based in Taiwan, China Motor Corporation specializes in the manufacturing and distribution of vehicles and their constituent components. Its product offerings are extensive, including commercial vehicles, sedans, light commercial vehicles (LCVs), aut...

China Motor Corporation Financial Statement Overview

Summary

A fortress balance sheet (Score 76) is offset by weakening earnings (Score 58) and poor cash generation (Score 34). Equity funds about 70% of the NT$54.0 billion asset base with debt-to-equity of just 0.19, providing strong downside protection in a cyclical industry, and gross margins have held steady near 15% for six years. However, revenue fell roughly 18% to NT$32.1 billion, net income declined for a second straight year to NT$2.99 billion, and ROE halved from 15.8% to 7.9%. Operating cash flow of NT$1.10 billion covered only about a third of net income, free cash flow was negative for a second consecutive year (-NT$1.0 billion), and total debt rose from under NT$1 billion to NT$7.21 billion. Profits also lean on non-operating income, weakening earnings quality.

Income Statement

58Neutral

Balance Sheet

76Positive

Cash Flow

34Negative

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Mar 2023	Dec 2021
Income Statement
Total Revenue	33.80B	32.09B	39.24B	38.51B	29.55B	31.13B
Gross Profit	4.85B	4.87B	5.71B	6.06B	4.87B	4.94B
EBITDA	3.77B	4.33B	5.54B	3.51B	-6.25B	6.03B
Net Income	3.40B	2.99B	4.01B	5.65B	-7.60B	4.18B
Balance Sheet
Total Assets	55.47B	54.04B	53.62B	50.36B	48.49B	54.74B
Cash, Cash Equivalents and Short-Term Investments	4.67B	4.02B	5.80B	5.46B	8.61B	12.30B
Total Debt	4.05B	7.21B	6.31B	778.54M	3.12B	2.56B
Total Liabilities	13.32B	12.29B	12.69B	10.87B	12.44B	8.41B
Stockholders Equity	38.35B	37.89B	37.11B	35.82B	32.33B	42.67B
Cash Flow
Free Cash Flow	1.37B	-999.24M	-1.91B	1.54B	881.98M	3.53B
Operating Cash Flow	3.33B	1.10B	258.41M	4.26B	1.76B	4.31B
Investing Cash Flow	-2.17B	-278.65M	255.53M	-5.15B	-1.84B	1.18B
Financing Cash Flow	-2.12B	-2.08B	-446.52M	-2.15B	-3.35B	-4.25B

China Motor Corporation Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:2204 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:6605	70Outperform	TWD 21.39B	8.33	―	5.04%	0.52%	23.32%
TW:6584	63Neutral	TWD 22.35B	29.37	―	0.78%	44.48%	204.25%
TW:2204	60Neutral	TWD 28.57B	8.32	―	6.98%	10.21%	12.47%
TW:6592	57Neutral	TWD 35.62B	10.95	―	5.41%	-5.16%	34.90%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:2101	50Neutral	TWD 20.27B	4.93	―	4.70%	10.34%	107.24%
TW:2201	43Neutral	TWD 28.37B	29.67	―	2.10%	-4.59%	-34.03%

* General Sector Average

Performance Comparison

TW:2204 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:2204	China Motor Corporation	51.60	-4.32	-7.73%
TW:2101	Nankang Rubber Tire Corp., Ltd.	27.65	-7.66	-21.70%
TW:2201	Yulon Motor Co.,Ltd	26.70	-8.51	-24.17%
TW:6584	NAN JUEN INTERNATIONAL CO., LTD.	314.50	8.71	2.85%
TW:6592	Hotai Finance Co., Ltd.	55.50	-1.87	-3.26%
TW:6605	Depo Auto Parts Industrial Co. Ltd.	129.00	-5.64	-4.19%

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

China Motor Corporation AI Stock Analysis