Merry Electronics Co., Ltd. (2439) AI Stock Analysis

Merry Electronics Co., Ltd.

(TWSE:2439)

Select Model

Rating:54Neutral

Price Target:TWD 68.00▼(-0.73% Downside)

Action:initiatedcoverage

Date:11/09/26

Merry Electronics scores in the lower-middle range. The dominant drag is profitability: despite record revenue, gross, operating and net margins have contracted for two consecutive periods and net income has fallen by more than half, pulling return on equity to around 5%. Reinforcing the caution, the technical setup is firmly bearish, with the share price below all major moving averages and negative MACD momentum. Partial offsets come from a de-risked balance sheet with debt-to-equity down to 0.29, a strong rebound in operating and free cash flow, and a high 6.2% dividend yield that cushions total return. However, a P/E of 18.9 on shrinking earnings offers little valuation support. The investment case rests on management restoring margins — until then, revenue growth alone adds limited shareholder value.

Positive Factors

Manageable LeverageImproved leverage and a sizable equity base provide financial flexibility as the company manages weaker earnings. This supports continued operations, reduces balance-sheet strain, and preserves capacity to fund necessary investment through the next several quarters.

Negative Factors

Sharp Revenue ContractionA 31.1% TTM revenue decline indicates a meaningful deterioration in demand, pricing, or product mix after prior growth. If this trajectory persists, lower scale could weaken operating leverage, reduce investment capacity, and make recovery in earnings more difficult.

Merry Electronics Co., Ltd. (2439) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 16.71B
Dividend Yield: 5.96%
Average Volume (3M): 1.58M
Price to Earnings (P/E): 19.1
Beta (1Y): 0.59
Revenue Growth: 8.74%
EPS Growth: -43.88%
Country: TW
Employees: 7,395
Sector: General
Sector Strength: 55
Industry: Consumer Electronics

Merry Electronics Co., Ltd. Business Overview & Revenue Model

Company Description

Established in Taichung, Taiwan, in 1975, Merry Electronics Co., Ltd. operates globally, specializing in the creation, production, servicing, and distribution of a broad spectrum of electronic and related products. Its diverse range encompasses every...

Merry Electronics Co., Ltd. Financial Statement Overview

Summary

Revenue has scaled consistently to a record NT$48.6bn on a trailing-twelve-month basis, but profitability is deteriorating sharply: gross margin has fallen from 13.3% to 10.9%, operating margin to 2.0% from 6.0% two years ago, and net income has dropped from NT$2.14bn to NT$0.90bn. The balance sheet is a relative strength, with borrowings cut to NT$4.9bn and debt-to-equity down to 0.29, continuing a multi-year deleveraging trend, though return on equity has slipped to roughly 5.3%. Cash flow has rebounded well, with operating cash flow of NT$2.83bn and free cash flow swinging back to a positive NT$1.79bn, but the five-year record is volatile and working-capital driven. Overall: stable financial footing undermined by persistent margin erosion and weakening returns on capital.

Income Statement

45Neutral

Balance Sheet

62Positive

Cash Flow

65Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	48.56B	46.49B	43.86B	36.69B	35.40B	36.18B
Gross Profit	5.30B	5.62B	5.85B	4.74B	4.55B	4.38B
EBITDA	1.58B	2.23B	3.45B	2.81B	2.91B	2.40B
Net Income	895.71M	1.34B	2.14B	1.32B	1.46B	1.13B
Balance Sheet
Total Assets	44.20B	44.79B	39.12B	32.61B	33.43B	33.86B
Cash, Cash Equivalents and Short-Term Investments	9.32B	10.89B	9.52B	6.70B	7.75B	6.32B
Total Debt	4.93B	7.37B	3.75B	5.66B	6.60B	8.29B
Total Liabilities	25.26B	25.71B	19.93B	19.13B	20.37B	21.71B
Stockholders Equity	17.00B	17.55B	18.02B	12.62B	12.27B	11.61B
Cash Flow
Free Cash Flow	1.79B	-348.90M	1.20B	1.68B	4.06B	1.33B
Operating Cash Flow	2.83B	1.04B	2.03B	2.22B	4.68B	2.66B
Investing Cash Flow	-370.86M	-1.31B	100.22M	-1.35B	66.58M	-1.63B
Financing Cash Flow	-2.07B	1.51B	735.13M	-2.02B	-2.82B	846.47M

Merry Electronics Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:2439 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:2374	62Neutral	TWD 17.71B	15.13	―	3.79%	55.45%	87.62%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:2439	54Neutral	TWD 16.88B	19.08	―	5.96%	8.74%	-43.88%
TW:4906	52Neutral	TWD 15.97B	719.00	―	1.33%	-20.19%	―
TW:2392	45Neutral	TWD 16.68B	4.41	―	2.92%	-10.50%	1834.43%
TW:3380	39Underperform	TWD 15.57B	60.80	―	1.75%	10.82%	―

* General Sector Average

Performance Comparison

TW:2439 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:2439	Merry Electronics Co., Ltd.	68.50	-38.88	-36.21%
TW:2374	Ability Enterprise Co., Ltd.	52.50	-31.61	-37.58%
TW:2392	Cheng Uei Precision Industry Co., Ltd.	34.30	-10.26	-23.03%
TW:3380	Alpha Networks Inc.	28.60	-1.53	-5.09%
TW:4906	GemTek Technology Co., Ltd.	35.50	8.84	33.17%
TW:7788	Song Chuan Precision Co Ltd	218.50	110.94	103.15%

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

Merry Electronics Co., Ltd. AI Stock Analysis