Patec Precision Industry Co., Ltd. (2236) AI Stock Analysis

Patec Precision Industry Co., Ltd.

(TWSE:2236)

Select Model

Rating:36Underperform

Price Target:TWD 83.00▼(-10.46% Downside)

Action:initiatedcoverage

Date:11/09/26

Patec Precision Industry scores poorly, driven primarily by deteriorating fundamentals: despite a more than 23-fold revenue increase from consolidation, gross margin collapsed to about 10.7%, the company posted operating and net losses, and free cash flow burn widened to roughly -NT$398 million while debt remains elevated at about 1.28x equity with a thin 27% equity cushion. Technicals reinforce the caution, with the price trading well below its 50-, 100- and 200-day moving averages and a negative MACD. Valuation adds no support, as the P/E is negative on loss-making earnings and the 0.35% dividend yield is immaterial. Positives — positive EBITDA, slightly lower leverage year over year, a low beta, and a historically profitable, cash-generative business — temper the picture only modestly. The investment case hinges on management integrating the expanded operation, restoring margins and returning to positive operating cash flow.

Positive Factors

Revenue ReboundThe sharp 2025 revenue rebound indicates that the company retained the ability to generate substantial top-line growth despite its subsequent profitability deterioration. Continued sales expansion could provide operating scale and a foundation for recovery if margins stabilize over the next several quarters.

Negative Factors

Margin CollapseThe steep and multi-year gross-margin decline signals materially weaker earnings quality and reduced operating leverage. Even with renewed revenue growth, lower retained profit per sale can limit reinvestment, weaken resilience, and make a sustained earnings recovery dependent on reversing cost pressure.

Patec Precision Industry Co., Ltd. (2236) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 5.67B
Dividend Yield: 0.33%
Average Volume (3M): 678.86K
Price to Earnings (P/E): -12.9
Beta (1Y): 0.67
Revenue Growth: 88.01%
EPS Growth: -191.43%
Country: TW
Employees: 798
Sector: General
Sector Strength: 55
Industry: Industrial - Machinery

Patec Precision Industry Co., Ltd. Business Overview & Revenue Model

Company Description

Patec Precision Industry Co., Ltd., together with its subsidiaries, provides components manufacturing and engineering solutions to the metal-forming industry in Singapore, Indonesia, China, Thailand, Vietnam, and Europe. The company offers ODM precis...

Patec Precision Industry Co., Ltd. Financial Statement Overview

Summary

Financials are the weakest link. Revenue scaled more than 23x to roughly NT$9.32 billion in FY2025, but almost certainly through consolidation rather than organic demand, and the quality of earnings deteriorated sharply: gross margin collapsed to about 10.7% from 19.3%, operating results turned negative, and the company swung to a net loss of about NT$380 million. The balance sheet carries debt of roughly NT$2.79 billion, or about 1.28x equity, with an equity cushion of only around 27% of assets, well above the historical 0.37x–0.58x leverage range. Cash flow is the most concerning element, with operating cash flow at roughly -NT$152 million and free cash flow burn widening to about -NT$398 million. Offsetting positives are positive EBITDA near NT$307 million, modestly reduced leverage versus 2024, and a profitable, cash-generative pre-2024 track record.

Income Statement

32Negative

Balance Sheet

41Neutral

Cash Flow

24Negative

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	10.42B	9.32B	1.78B	1.82B	1.42B	1.37B
Gross Profit	1.20B	995.98M	344.63M	578.95M	394.25M	356.36M
EBITDA	407.36M	307.15M	500.64M	278.62M	203.99M	188.99M
Net Income	-399.18M	-379.82M	383.17M	139.25M	74.86M	67.30M
Balance Sheet
Total Assets	8.44B	8.03B	9.39B	2.49B	2.03B	2.16B
Cash, Cash Equivalents and Short-Term Investments	1.31B	1.43B	2.20B	779.11M	465.83M	742.26M
Total Debt	2.75B	2.79B	3.29B	570.81M	534.34M	616.61M
Total Liabilities	6.04B	5.72B	7.09B	915.99M	894.49M	927.83M
Stockholders Equity	2.42B	2.19B	2.12B	1.53B	1.14B	1.15B
Cash Flow
Free Cash Flow	-189.63M	-397.73M	-42.93M	45.19M	-38.97M	97.89M
Operating Cash Flow	153.78M	-152.34M	30.59M	86.21M	-15.43M	128.27M
Investing Cash Flow	-643.23M	-342.24M	-1.75B	-29.03M	-17.88M	12.84M
Financing Cash Flow	-47.84M	-344.75M	2.60B	280.91M	-278.98M	-243.64M

Patec Precision Industry Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:2236 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:2221	69Neutral	TWD 6.43B	56.44	―	0.90%	18.85%	87.57%
TW:2228	62Neutral	TWD 5.39B	17.08	―	6.81%	-2.44%	-43.17%
TW:3310	62Neutral	TWD 4.74B	17.31	―	5.39%	19.95%	5.00%
TW:9905	58Neutral	TWD 6.33B	12.07	―	5.28%	21.06%	36.11%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:2236	36Underperform	TWD 5.90B	-12.86	―	0.33%	88.01%	-191.43%

* General Sector Average

Performance Comparison

TW:2236 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:2236	Patec Precision Industry Co., Ltd.	92.70	7.57	8.90%
TW:2221	Tachia Yung Ho Machine Industry Co., Ltd.	167.00	139.45	506.28%
TW:2228	Iron Force Industrial Co., Ltd.	66.10	-20.39	-23.57%
TW:3310	Chialin Precision Industrial Co., Ltd.	64.90	4.67	7.75%
TW:7736	HUSHAN Autoparts, Inc.	68.30	-19.48	-22.19%
TW:9905	Great China Metal Industry Co., Ltd.	20.85	1.88	9.93%

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

Patec Precision Industry Co., Ltd. AI Stock Analysis