Hi Sharp Electronics Co., Ltd. (3128) AI Stock Analysis

Hi Sharp Electronics Co., Ltd.

(TPEx:3128)

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Rating:48Neutral

Price Target:TWD 16.00▼(-10.86% Downside)

Action:initiatedcoverage

Date:11/09/26

Hi Sharp scores below average, driven primarily by deteriorating financial fundamentals. Operating cash flow swung negative and free cash flow reached NT$-262.7 million on roughly NT$261 million of capital spending, which has been funded by debt that now nearly equals equity (0.95x) — a meaningful step up in financial risk while return on equity fell to 7.8%. Earnings momentum has also turned, with net income down 12% on flat revenue, though a steadily improving gross margin (32.8%) shows the core business is operating more profitably. Technicals compound the caution, with the share price trading well below all major moving averages and MACD negative, confirming a persistent downtrend. A reasonable 15.2x P/E and a 2.47% dividend yield offer some support, but until capital spending translates into renewed growth and a recovery in operating cash flow, the risk profile remains elevated.

Positive Factors

Positive ProfitabilityThe company remains profitable on a net basis, with a 2025 margin of about 5.6%. Continued positive earnings provide an operating foundation and demonstrate that the business can generate accounting profits despite its recent slowdown in revenue and operating performance.

Negative Factors

Weak Cash GenerationCash generation is materially weaker than reported profitability, with operating cash flow turning negative and free cash flow deeply negative in the latest two years. Persistent cash outflows can increase reliance on financing capacity and limit flexibility to fund operations or growth.

Hi Sharp Electronics Co., Ltd. (3128) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 892.78M
Dividend Yield: 2.23%
Average Volume (3M): 104.50K
Price to Earnings (P/E): 15.5
Beta (1Y): 0.61
Revenue Growth: -12.58%
EPS Growth: -22.95%
Country: TW
Employees: 201
Sector: General
Sector Strength: 55
Industry: Communication Equipment

Hi Sharp Electronics Co., Ltd. Business Overview & Revenue Model

Company Description

Hi Sharp Intelligence Technology Co.,Ltd., a company based in Taiwan, is dedicated to the development, manufacturing, and sales of advanced intelligent surveillance systems. Their extensive product lineup includes NDAA-compliant IP cameras, a wide ar...

Hi Sharp Electronics Co., Ltd. Financial Statement Overview

Summary

A mixed-to-weak profile. The income statement is the strongest element (score 62): gross margin has improved every year from 26.6% in 2020 to 32.8% in 2025 and revenue has roughly grown to NT$1.10 billion, but sales were flat year over year and net income fell about 12% to NT$61.5 million, with net margin slipping to 5.6%. The balance sheet is adequate but increasingly leveraged (score 53): equity rose 17% to NT$785.9 million, yet total debt jumped to NT$746.9 million from NT$246.8 million in 2020, lifting debt-to-equity to 0.95x, while return on equity fell to 7.8% from 10.5%. Cash flow is the clear weak link (score 26): operating cash flow turned negative at NT$-1.7 million versus NT$120.4 million a year earlier, and heavy capex of roughly NT$261 million drove free cash flow to NT$-262.7 million, the worst of the past six years. The gap between reported profit and actual cash generation, funded by rising debt, is the key risk.

Income Statement

62Positive

Balance Sheet

53Neutral

Cash Flow

26Negative

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.02B	1.10B	1.10B	974.47M	1.07B	931.84M
Gross Profit	312.73M	360.49M	348.42M	282.26M	323.18M	247.53M
EBITDA	87.64M	108.69M	111.95M	77.60M	119.74M	60.84M
Net Income	55.81M	61.55M	70.17M	37.09M	73.84M	33.48M
Balance Sheet
Total Assets	1.95B	1.79B	1.64B	1.23B	1.25B	1.10B
Cash, Cash Equivalents and Short-Term Investments	193.65M	49.43M	110.14M	93.81M	81.11M	54.94M
Total Debt	874.22M	746.89M	591.73M	377.74M	371.96M	315.42M
Total Liabilities	1.15B	986.85M	952.72M	575.13M	617.48M	511.79M
Stockholders Equity	779.80M	785.91M	670.00M	629.64M	610.98M	574.32M
Cash Flow
Free Cash Flow	-111.58M	-262.74M	-157.30M	2.01M	22.99M	-35.99M
Operating Cash Flow	83.03M	-1.66M	120.38M	22.33M	148.91M	-29.63M
Investing Cash Flow	-194.16M	-258.47M	-279.12M	-25.96M	-139.72M	-14.25M
Financing Cash Flow	-186.24M	198.39M	166.96M	8.27M	9.12M	24.18M

Hi Sharp Electronics Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:3128 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:8176	59Neutral	TWD 580.85M	33.71	―	―	-46.30%	-54.49%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:3297	49Neutral	TWD 897.35M	26.52	―	―	24.69%	146.29%
TW:3128	48Neutral	TWD 900.31M	15.54	―	2.23%	-12.58%	-22.95%
TW:6560	45Neutral	TWD 984.16M	20.73	―	―	62.39%	―
TW:6229	37Underperform	TWD 809.23M	19.44	―	2.99%	34.82%	―
TW:3057	33Underperform	TWD 834.73M	-8.04	―	―	0.03%	9.46%

* General Sector Average

Performance Comparison

TW:3128 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:3128	Hi Sharp Electronics Co., Ltd.	17.95	-8.19	-31.33%
TW:3057	Promise Technology, Inc.	12.30	-4.60	-27.22%
TW:3297	Hunt Electronic Co., Ltd.	25.45	-21.45	-45.74%
TW:6229	V-TAC Technology co., Ltd.	20.05	-3.26	-13.97%
TW:6560	APPRO Photoelectron, Inc.	29.40	-12.10	-29.16%
TW:8176	Z-Com, Inc.	10.30	-2.59	-20.09%

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

Hi Sharp Electronics Co., Ltd. AI Stock Analysis