Kuo Yang Construction Co., Ltd. (2505) AI Stock Analysis

Kuo Yang Construction Co., Ltd.

(TWSE:2505)

Select Model

Rating:65Neutral

Price Target:TWD 18.00▲(3.75% Upside)

Action:initiatedcoverage

Date:11/09/26

The score is anchored by solid fundamentals in a strong delivery year: sharply higher revenue and profit, healthy margins, reduced leverage and a decisive swing to NT$1.5 billion of free cash flow. Valuation reinforces the case, with a modest 8.5x P/E, a near-6% dividend yield and low market sensitivity. The main drags are technical and cyclical — the stock trades below all key moving averages with negative MACD momentum, and the business model produces highly lumpy revenue, cash flow and returns, meaning current peak-cycle results are unlikely to repeat every year.

Positive Factors

2025 Profitability and Revenue ReboundThe sharp 2025 revenue rebound and healthy net margin show that project recognition and profitability can recover strongly after a weak period. This strengthens near-term earnings capacity and provides a foundation for continued investment, although the durability of the improvement depends on the construction cycle.

Negative Factors

High Earnings CyclicalityLarge revenue swings and the 2024 operating loss make earnings less predictable than the latest year alone suggests. Construction and development performance can therefore vary materially across reporting periods, complicating planning and reducing confidence that the 2025 profitability level will persist through the cycle.

Kuo Yang Construction Co., Ltd. (2505) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 6.44B
Dividend Yield: 5.76%
Average Volume (3M): 408.95K
Price to Earnings (P/E): 5.1
Beta (1Y): 0.31
Revenue Growth: 179.05%
EPS Growth: 102.73%
Country: TW
Employees: 80
Sector: General
Sector Strength: 55
Industry: Real Estate - Development

Kuo Yang Construction Co., Ltd. Business Overview & Revenue Model

Company Description

Kuo Yang Construction Co.,Ltd is primarily involved in constructing public residential developments across Taiwan. Beyond this, the firm actively deals in the acquisition, disposal, and letting of various commercial properties, including commercial h...

Kuo Yang Construction Co., Ltd. Financial Statement Overview

Summary

Kuo Yang is in the favorable phase of its development cycle. Revenue rebounded roughly sevenfold to NT$4.37 billion and net income rose 356% to NT$902 million, with healthy 28.3% gross, 23.3% operating and 20.6% net margins. The balance sheet improved as debt fell to NT$8.1 billion and debt-to-equity eased to 0.75, while equity has grown steadily since 2020. Cash flow swung from three years of burn to NT$1.57 billion of operating cash flow and NT$1.54 billion of free cash flow, with near dollar-for-dollar conversion of earnings. Offsetting these strengths is extreme lumpiness: revenue has ranged from NT$0.6 billion to NT$14.3 billion over six years, operating cash flow was negative in four of six years, and ROE of 8.3% remains far below the 53% peak in 2020, so results must be judged across a full cycle.

Income Statement

68Positive

Balance Sheet

65Positive

Cash Flow

66Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.83B	4.37B	607.69M	735.46M	3.95B	5.12B
Gross Profit	1.05B	1.24B	237.44M	291.55M	784.88M	1.36B
EBITDA	711.91M	1.05B	295.42M	148.72M	614.38M	1.24B
Net Income	751.73M	901.78M	197.61M	304.20M	485.93M	982.15M
Balance Sheet
Total Assets	23.68B	22.71B	22.46B	18.55B	16.78B	17.35B
Cash, Cash Equivalents and Short-Term Investments	3.66B	3.56B	3.24B	2.78B	2.71B	3.43B
Total Debt	8.15B	8.13B	9.37B	6.87B	6.11B	6.12B
Total Liabilities	12.76B	11.65B	12.18B	8.34B	7.16B	8.09B
Stockholders Equity	10.75B	10.89B	10.16B	10.10B	9.51B	9.23B
Cash Flow
Free Cash Flow	685.07M	1.54B	-1.32B	-619.10M	-741.98M	579.23M
Operating Cash Flow	690.82M	1.57B	-1.30B	-608.64M	-740.01M	579.12M
Investing Cash Flow	154.59M	162.82M	-666.70M	-85.06M	69.44M	-101.84M
Financing Cash Flow	-402.06M	-1.40B	2.10B	589.62M	230.35M	-3.54B

Kuo Yang Construction Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:2505 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:6186	67Neutral	TWD 6.18B	5.39	―	17.86%	-36.90%	-38.48%
TW:2505	65Neutral	TWD 6.57B	5.07	―	5.76%	179.05%	102.73%
TW:2536	63Neutral	TWD 5.92B	4.22	―	11.33%	86.45%	163.81%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:2534	51Neutral	TWD 7.05B	156.32	―	10.27%	-78.07%	-96.57%
TW:5525	49Neutral	TWD 6.49B	5.43	―	5.66%	235.09%	662.07%
TW:5531	39Underperform	TWD 5.87B	55.18	―	―	-72.62%	-9.86%

* General Sector Average

Performance Comparison

TW:2505 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:2505	Kuo Yang Construction Co., Ltd.	17.35	-0.56	-3.12%
TW:2534	Hung Sheng Construction Co., Ltd.	14.60	-4.45	-23.36%
TW:2536	Hong Pu Real Estate Development CO LTD	17.65	-6.17	-25.90%
TW:5525	Sweeten Real Estate Development Co. Ltd.	21.20	-5.69	-21.15%
TW:5531	Shining Building Business Co. Ltd.	6.17	-3.02	-32.86%
TW:6186	Shin Ruenn Development Co., Ltd	27.05	-23.63	-46.63%

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

Kuo Yang Construction Co., Ltd. AI Stock Analysis