KYE Systems Corp. (2365) AI Stock Analysis

KYE Systems Corp.

(TWSE:2365)

Select Model

Rating:51Neutral

Price Target:TWD 23.00▼(-2.54% Downside)

Action:initiatedcoverage

Date:11/09/26

KYE Systems scores below average overall. The dominant issue is a shrinking business: revenue has contracted more than 40% since 2020, profits halved in the latest year, and return on equity sits near 2%, even though gross margins have improved meaningfully to about 41%. Its balance sheet is a genuine strength — almost debt-free with equity funding the vast majority of assets — which limits downside risk but currently generates very modest returns. Technicals reinforce caution, with the price below all key moving averages and negative MACD, though deeply oversold RSI and Stochastic readings suggest selling may be extended. Valuation is the final drag: a 42.5x P/E and a 1.3% yield look expensive against declining earnings. The company is financially durable, but it must stabilize revenue and improve returns on capital to justify a higher rating.

Positive Factors

Conservative Balance SheetVery low leverage and a large equity base provide financial resilience through hardware-market cycles. This reduces debt-related pressure on cash flow, preserves flexibility for investment, and gives KYE greater capacity to withstand demand or profitability fluctuations.

Negative Factors

Uneven Revenue MomentumThe sharp rebound followed by a 2025 pullback shows that top-line momentum is not yet consistently advancing. Uneven revenue makes capacity planning and operating leverage less predictable, limiting confidence that recent earnings improvements will compound steadily.

KYE Systems Corp. (2365) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 5.25B
Dividend Yield: 1.27%
Average Volume (3M): 857.55K
Price to Earnings (P/E): 46.5
Beta (1Y): 1.04
Revenue Growth: 12.45%
EPS Growth: 59.79%
Country: TW
Employees: 861
Sector: General
Sector Strength: 55
Industry: Computer Hardware

KYE Systems Corp. Business Overview & Revenue Model

Company Description

KYE Systems Corp. engages in the manufacturing, processing, and sale of computer peripheral products for business, lifestyle, mobility, and gaming peripherals in Taiwan and internationally. The company offers mice, keyboards, speakers, headsets, webc...

KYE Systems Corp. Financial Statement Overview

Summary

A tale of two halves. The balance sheet (79) is fortress-like: equity funds roughly 86% of total assets, debt-to-equity is just 0.085 after steady deleveraging, and solvency risk is minimal. However, the income statement (44) is weak — revenue has shrunk more than 40% since 2020 to about NT$959 million, operating margin is thin at roughly 5.5%, and 2025 net income halved to NT$71 million despite gross margin expanding to about 41%. Cash flow (58) is positive and converts well (free cash flow about 81% of net income), but operating cash flow fell by half to NT$106 million and has been volatile, including negative years in 2020-2021. Returns on capital remain low (ROE near 2.3%), reflecting a large, underutilized asset base.

Income Statement

44Neutral

Balance Sheet

79Positive

Cash Flow

58Neutral

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	980.70M	959.36M	978.82M	769.55M	1.02B	1.37B
Gross Profit	385.72M	393.10M	394.37M	290.63M	288.69M	342.12M
EBITDA	113.13M	81.65M	223.51M	157.77M	116.79M	147.79M
Net Income	121.27M	70.98M	142.65M	72.20M	54.41M	50.51M
Balance Sheet
Total Assets	3.63B	3.54B	3.63B	3.56B	3.49B	3.58B
Cash, Cash Equivalents and Short-Term Investments	1.49B	1.45B	1.58B	1.30B	1.14B	1.12B
Total Debt	248.72M	260.52M	285.05M	376.98M	339.84M	381.45M
Total Liabilities	506.32M	446.99M	494.44M	539.67M	516.10M	635.75M
Stockholders Equity	3.08B	3.05B	3.10B	2.98B	2.94B	2.91B
Cash Flow
Free Cash Flow	111.96M	86.34M	184.69M	170.21M	258.88M	-123.88M
Operating Cash Flow	118.17M	106.05M	213.33M	174.65M	265.20M	-97.83M
Investing Cash Flow	134.30M	-37.08M	315.39M	-296.97M	-189.06M	-200.04M
Financing Cash Flow	-158.91M	-156.79M	-169.54M	-99.67M	-87.47M	-30.97M

KYE Systems Corp. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:2365 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:6143	68Neutral	TWD 5.80B	9.01	―	8.55%	8.15%	19.48%
TW:6117	62Neutral	TWD 5.57B	12.94	―	3.31%	13.66%	69.40%
TW:5474	57Neutral	TWD 4.98B	22.17	―	3.13%	17.43%	-6.13%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:2365	51Neutral	TWD 5.34B	46.55	―	1.27%	12.45%	59.79%
TW:8076	49Neutral	TWD 5.00B	129.28	―	3.90%	31.21%	―
TW:3558	45Neutral	TWD 6.20B	50.48	―	2.90%	-3.32%	-69.25%

* General Sector Average

Performance Comparison

TW:2365 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:2365	KYE Systems Corp.	23.60	-10.98	-31.75%
TW:3558	Senao Networks, Inc.	103.50	-30.83	-22.95%
TW:5474	Yuan High-Tech Development Co., Ltd.	128.00	-28.68	-18.30%
TW:6117	In Win Development Inc.	60.40	-16.04	-20.98%
TW:6143	Netronix, Inc.	70.20	-51.99	-42.55%
TW:8076	Firich Enterprises Co. Ltd.	17.95	-5.62	-23.84%

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

KYE Systems Corp. AI Stock Analysis