Mercuries Data Systems Ltd. (2427) AI Stock Analysis

Mercuries Data Systems Ltd.

(TWSE:2427)

Select Model

Rating:62Neutral

Price Target:TWD 22.00▲(10.83% Upside)

Action:initiatedcoverage

Date:11/09/26

Mercuries Data Systems scores moderately. The strongest support comes from its financial profile: rapid revenue growth, a sharply deleveraged balance sheet (debt-to-equity down to 0.41) and a major cash flow rebound that funded debt repayment. Offsetting this are the core risks — gross margin has fallen roughly 11 percentage points in two years, net margin is under 5%, return on equity is only ~9%, and operating cash flow has been volatile and negative in three of the prior four years. Technicals are the main drag, with the price below all key moving averages and a negative MACD indicating an entrenched downtrend, though oversold RSI and Stochastic readings suggest selling may be stretched. A reasonable 15.2x P/E and a 3.34% dividend yield provide valuation and income support, keeping the overall score near the middle of the range.

Positive Factors

Accelerating Revenue GrowthStrong, accelerating revenue growth indicates continued demand for the company’s enterprise IT solutions and services. Sustained top-line expansion can improve operating scale, support reinvestment in capabilities, and strengthen customer relevance over the next several quarters.

Negative Factors

Margin CompressionThe sharp decline in gross margin, alongside lower EBIT and EBITDA margins, signals weaker earnings quality despite strong revenue growth. Persistent cost or pricing pressure would reduce operating leverage, constrain profit conversion, and make future earnings more sensitive to execution.

Mercuries Data Systems Ltd. (2427) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 3.94B
Dividend Yield: 3.53%
Average Volume (3M): 761.48K
Price to Earnings (P/E): 86.3
Beta (1Y): 0.57
Revenue Growth: 21.74%
EPS Growth: -84.64%
Country: TW
Employees: 880
Sector: General
Sector Strength: 55
Industry: Hardware, Equipment & Parts

Mercuries Data Systems Ltd. Business Overview & Revenue Model

Company Description

Mercuries Data Systems Ltd., together with its subsidiaries, engages in the sales, leasing, and maintenance of financial automation service machines in Taiwan. The company offers financial software systems, such as whitelist management, deposit machi...

Mercuries Data Systems Ltd. Financial Statement Overview

Summary

Solid and improving, but low-quality profitability. Revenue has more than doubled since 2020 to roughly NT$6.5 billion, with net income rising to about NT$303 million, yet gross margin has collapsed from ~35% in 2023 to ~24% in 2025 and net margin sits below 5%, signalling a shift toward price-competitive, low-value hardware. The balance sheet is the standout: total debt was nearly halved to about NT$1.34 billion, cutting debt-to-equity to 0.41, the most conservative level in six years, with equity funding nearly half of assets. Cash flow rebounded powerfully to roughly NT$1.79 billion operating inflow and NT$1.60 billion free cash flow, funding the deleveraging — though operating cash flow was negative in three of the prior four years, so this looks cyclical rather than a new baseline. Return on equity remains modest at about 9%.

Income Statement

66Positive

Balance Sheet

70Positive

Cash Flow

72Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.53B	6.53B	4.87B	3.97B	3.79B	3.49B
Gross Profit	1.51B	1.56B	1.44B	1.40B	1.25B	1.07B
EBITDA	425.09M	544.28M	484.17M	436.16M	363.62M	249.59M
Net Income	280.76M	302.60M	281.98M	251.83M	192.05M	149.23M
Balance Sheet
Total Assets	7.05B	7.02B	7.73B	6.71B	5.59B	4.58B
Cash, Cash Equivalents and Short-Term Investments	1.14B	765.36M	521.43M	558.85M	416.88M	458.80M
Total Debt	784.56M	1.34B	2.47B	2.05B	1.74B	1.10B
Total Liabilities	3.56B	3.73B	4.60B	3.65B	3.15B	2.30B
Stockholders Equity	3.49B	3.29B	3.12B	3.06B	2.43B	2.28B
Cash Flow
Free Cash Flow	1.60B	1.60B	-234.36M	-399.46M	-575.51M	-14.34M
Operating Cash Flow	1.80B	1.79B	-99.45M	-302.10M	-152.36M	66.53M
Investing Cash Flow	-272.82M	-273.27M	-130.33M	-108.33M	-465.27M	-53.38M
Financing Cash Flow	-793.59M	-1.29B	195.83M	568.83M	580.69M	-12.40M

Mercuries Data Systems Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:2427 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:3046	71Outperform	TWD 3.92B	10.16	―	5.96%	31.68%	27.27%
TW:2468	64Neutral	TWD 4.62B	50.22	―	1.46%	-1.96%	18.20%
TW:2427	62Neutral	TWD 4.28B	86.30	―	3.53%	21.74%	-84.64%
TW:5258	58Neutral	TWD 4.42B	8.44	―	2.71%	7.96%	23.25%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:3555	44Neutral	TWD 5.04B	10.01	―	―	262.16%	―

* General Sector Average

Performance Comparison

TW:2427 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:2427	Mercuries Data Systems Ltd.	19.85	-5.94	-23.04%
TW:2468	Fortune Information System Corp.	68.30	26.67	64.08%
TW:3046	Aopen Incorporated	50.30	3.55	7.59%
TW:3555	BaaS Innovation Co., Ltd.	129.50	58.10	81.37%
TW:5258	Castles Technology Co. Ltd.	37.15	-26.99	-42.08%
TW:7821	Mitac Digital Technology Corporation	31.45	-25.82	-45.09%

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

Mercuries Data Systems Ltd. AI Stock Analysis