LEOFOO DEVELOPMENT CO., LTD. (2705) AI Stock Analysis

LEOFOO DEVELOPMENT CO., LTD.

(TWSE:2705)

Select Model

Rating:49Neutral

Price Target:TWD 14.50▼(-2.03% Downside)

Action:initiatedcoverage

Date:11/09/26

Leofoo Development scores below average overall. The dominant drag is its heavily leveraged balance sheet — NT$8.88bn of debt against NT$5.03bn of equity, essentially unchanged over five years — paired with a low 3.3% return on equity and a top line that has stalled after two years of strong rebound. Offsetting this, the company is reliably cash-generative, with NT$420m of free cash flow and operating cash flow roughly three times net income, and profitability has nearly doubled year-over-year. Technicals add further pressure: the stock sits below all major moving averages with a negative MACD, and while RSI and Stochastic readings are deeply oversold, no reversal has been confirmed. A 19.5x P/E with no dividend yield leaves limited valuation cushion. The low beta of 0.18 makes this a defensive, low-volatility holding, but meaningful upside likely requires visible debt reduction or a return to revenue growth.

Positive Factors

Profitability RecoveryThe return to positive net income and higher net margin shows a meaningful recovery from the 2020–2022 loss period. If maintained, improved profitability can strengthen internal funding, support reinvestment across hospitality assets, and provide a more durable earnings base.

Negative Factors

High LeveragePersistent leverage of roughly 1.7–1.8 times equity limits financial flexibility in a cyclical lodging environment. The debt load can constrain investment and shareholder returns, while modest profitability relative to borrowings leaves less room to absorb prolonged weakness.

LEOFOO DEVELOPMENT CO., LTD. (2705) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 2.84B
Dividend Yield: ―
Average Volume (3M): 99.23K
Price to Earnings (P/E): 20.0
Beta (1Y): 0.18
Revenue Growth: -4.36%
EPS Growth: 88.01%
Country: TW
Employees: 833
Sector: General
Sector Strength: 55
Industry: Travel Lodging

LEOFOO DEVELOPMENT CO., LTD. Business Overview & Revenue Model

Company Description

Leofoo Development Co., Ltd. is a Taiwanese enterprise primarily involved in the tourism and hospitality sector. The company manages a diverse portfolio of accommodation and leisure facilities, including prominent hotel brands like the Leofoo Hotel a...

LEOFOO DEVELOPMENT CO., LTD. Financial Statement Overview

Summary

Leofoo has completed a credible post-pandemic turnaround: revenue recovered from NT$1.49bn in 2020 to NT$2.29bn, profits nearly doubled to NT$167m, operating margin expanded to 15.0%, and EBITDA margin is a healthy 39.5%. Cash flow is the standout, with operating cash flow of NT$547m and free cash flow of NT$420m — roughly three times reported net income — confirming genuine cash profitability (Cash Flow 66). However, the balance sheet remains the weak link (Balance Sheet 42): NT$8.88bn of debt versus NT$5.03bn equity (1.77x D/E) has barely declined in five years, and return on equity is just 3.3%. The income statement (58) is held back by a flattening top line (-1.5% year-over-year), a thinner gross margin of 32.7%, and a net margin of only 7.3%. Net result: a stabilizing, cash-generative business, but leverage and modest returns cap the score.

Income Statement

58Neutral

Balance Sheet

42Neutral

Cash Flow

66Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.27B	2.29B	2.32B	2.21B	1.68B	1.26B
Gross Profit	722.88M	748.67M	800.75M	627.63M	405.23M	68.67M
EBITDA	691.16M	905.24M	837.01M	658.70M	404.42M	470.72M
Net Income	142.18M	166.59M	88.82M	-97.74M	-319.94M	-277.01M
Balance Sheet
Total Assets	16.02B	15.79B	15.43B	15.64B	15.77B	16.05B
Cash, Cash Equivalents and Short-Term Investments	560.56M	414.84M	322.01M	350.21M	324.68M	355.92M
Total Debt	4.82B	8.88B	8.67B	8.86B	8.94B	8.98B
Total Liabilities	11.08B	10.77B	10.57B	10.81B	10.86B	10.83B
Stockholders Equity	4.94B	5.03B	4.86B	4.83B	4.91B	5.23B
Cash Flow
Free Cash Flow	363.49M	420.21M	403.10M	362.46M	124.62M	-60.76M
Operating Cash Flow	525.58M	546.89M	508.96M	479.12M	237.35M	34.24M
Investing Cash Flow	-651.68M	-552.98M	-349.49M	-399.23M	-178.99M	-463.58M
Financing Cash Flow	400.07M	100.33M	-189.79M	-54.38M	-92.62M	493.93M

LEOFOO DEVELOPMENT CO., LTD. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:2705 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:2745	72Outperform	TWD 2.71B	8.13	―	9.26%	15.68%	15.90%
TW:2739	59Neutral	TWD 3.02B	8.13	―	7.88%	2.69%	414.01%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:1233	55Neutral	TWD 2.58B	30.64	―	0.70%	1.42%	17.11%
TW:2754	54Neutral	TWD 2.89B	15.31	―	1.64%	6.28%	91.71%
TW:2705	49Neutral	TWD 2.80B	20.00	―	―	-4.36%	88.01%
TW:2722	39Underperform	TWD 2.71B	-33.07	―	0.79%	-6.05%	-28.49%

* General Sector Average

Performance Comparison

TW:2705 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:2705	LEOFOO DEVELOPMENT CO., LTD.	14.80	-2.10	-12.43%
TW:1233	Ten Ren Tea Co., Ltd.	28.50	-2.29	-7.43%
TW:2722	Chateau International Development Co. Ltd.	18.85	-9.80	-34.21%
TW:2739	My Humble House Hospitality Management Consulting Co Ltd	32.75	-1.49	-4.35%
TW:2745	Life Travel & Tourist Service Co. Ltd.	81.00	-26.09	-24.36%
TW:2754	Kura Sushi Asia Co., Ltd.	61.00	-24.90	-28.99%

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

LEOFOO DEVELOPMENT CO., LTD. AI Stock Analysis