GeniuS Electronic Optical Co., Ltd. (3406) AI Stock Analysis

GeniuS Electronic Optical Co., Ltd.

(TWSE:3406)

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Rating:67Neutral

Price Target:TWD 895.00▼(-10.05% Downside)

Action:initiatedcoverage

Date:11/09/26

GeniuS Electronic Optical scores in the upper-middle range, driven primarily by financial resilience: a materially de-levered balance sheet (debt-to-equity of just 0.19), consistent revenue growth, and strong free cash flow of NT$5.63bn. The main drag is earnings quality — gross margin has fallen from 43.5% to 30.7% since 2020, net income declined ~14% in 2025, and ROE slipped to 14.0%, which makes the 22.6x P/E look demanding. Technicals add near-term caution: despite a strong longer-term uptrend above the 100- and 200-day averages, the stock has broken below its 20- and 50-day averages with negative MACD and deeply depressed Stochastic readings. A 2.06% dividend yield and low beta offer some support. The investment case hinges on margin stabilization.

Positive Factors

Improving Balance SheetThe materially lower leverage and expanding equity base provide stronger financial resilience than in prior years. A conservative capital structure should preserve flexibility to fund operations, withstand demand variability, and support investment without relying heavily on additional borrowing.

Negative Factors

Margin CompressionThe decline in profitability despite revenue growth indicates weaker earnings quality and suggests that cost pressure or product mix has reduced operating efficiency. If this persists, it could limit profit growth, reduce reinvestment capacity, and weaken the benefit of continued sales expansion.

GeniuS Electronic Optical Co., Ltd. (3406) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 120.05B
Dividend Yield: 1.71%
Average Volume (3M): 6.74M
Price to Earnings (P/E): 27.3
Beta (1Y): 0.84
Revenue Growth: 15.85%
EPS Growth: 24.44%
Country: TW
Employees: 12,609
Sector: General
Sector Strength: 55
Industry: Computer Hardware

GeniuS Electronic Optical Co., Ltd. Business Overview & Revenue Model

Company Description

Genius Electronic Optical Co., Ltd. is a Taiwan-based optical technology firm specializing in the design, development, and distribution of optical lenses. Its product portfolio encompasses lenses for mobile devices, as well as advanced optics tailore...

GeniuS Electronic Optical Co., Ltd. Financial Statement Overview

Summary

A well-capitalized, cash-generative optical components supplier with a notable margin problem. The balance sheet is the standout (score 82): total debt was cut from NT$11.29bn in 2023 to NT$4.92bn in 2025, pushing debt-to-equity down to a conservative 0.19, with equity funding ~61% of assets. Cash flow is solid (score 73): operating cash flow of NT$7.47bn covers net income roughly twice over and free cash flow of NT$5.63bn converts ~75% of earnings into cash, though both stepped down from the exceptional 2024 levels. The income statement is the weak link (score 63): revenue grew ~7.8% to NT$24.99bn, but gross margin compressed from 43.5% in 2020 to 30.7%, operating margin fell to 17.9% from 26.3%, net income declined ~14% to NT$3.70bn, and ROE slipped to 14.0% from 17.4%. Growth is being bought at the cost of profitability.

Income Statement

63Positive

Balance Sheet

82Very Positive

Cash Flow

73Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	26.71B	24.99B	23.19B	21.67B	19.22B	16.74B
Gross Profit	8.80B	7.67B	8.06B	7.73B	7.65B	5.92B
EBITDA	9.68B	8.49B	10.29B	8.44B	7.79B	5.96B
Net Income	4.17B	3.70B	4.32B	3.07B	3.27B	2.30B
Balance Sheet
Total Assets	44.64B	43.64B	43.04B	41.85B	38.18B	30.46B
Cash, Cash Equivalents and Short-Term Investments	15.15B	12.89B	11.76B	8.71B	4.51B	4.12B
Total Debt	4.64B	4.92B	7.51B	11.29B	9.73B	7.44B
Total Liabilities	17.60B	17.16B	18.27B	20.75B	18.50B	13.38B
Stockholders Equity	27.06B	26.51B	24.79B	21.13B	19.72B	17.10B
Cash Flow
Free Cash Flow	6.67B	5.63B	9.17B	4.52B	1.29B	234.05M
Operating Cash Flow	8.37B	7.47B	10.65B	8.62B	7.04B	3.97B
Investing Cash Flow	-2.92B	-3.42B	-3.03B	-4.42B	-7.42B	-5.17B
Financing Cash Flow	-4.13B	-4.54B	-5.38B	159.56M	733.74M	1.09B

GeniuS Electronic Optical Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:3406 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:3406	67Neutral	TWD 107.04B	27.33	―	1.71%	15.85%	24.44%
TW:2385	64Neutral	TWD 63.95B	9.74	―	8.25%	-10.82%	-28.50%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:3374	55Neutral	TWD 115.19B	80.66	―	0.54%	16.99%	21.12%
TW:6789	54Neutral	TWD 120.36B	67.41	―	0.76%	4.84%	32.31%
TW:2466	53Neutral	TWD 62.62B	252.88	―	―	-18.81%	―
TW:3363	46Neutral	TWD 46.71B	-351.26	―	―	-3.20%	-2090.12%

* General Sector Average

Performance Comparison

TW:3406 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:3406	GeniuS Electronic Optical Co., Ltd.	995.00	560.61	129.05%
TW:2385	Chicony Electronics Co. Ltd.	87.30	-33.21	-27.56%
TW:2466	Cosmo Electronics Corporation	397.00	345.50	670.87%
TW:3363	FOCI Fiber Optic Communications, Inc.	410.00	50.79	14.14%
TW:3374	Xintec Inc.	466.50	328.15	237.19%
TW:6789	VisEra Technologies Co., Ltd.	394.50	148.38	60.29%

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

GeniuS Electronic Optical Co., Ltd. AI Stock Analysis