Innolux Corp. (3481) AI Stock Analysis

Innolux Corp.

(TWSE:3481)

Select Model

Rating:45Neutral

Price Target:TWD 35.00▼(-13.79% Downside)

Action:initiatedcoverage

Date:11/09/26

Innolux scores below average, driven primarily by thin profitability: despite revenue growth and better gross margins, the company remains loss-making at the operating line with effectively zero return on equity. A conservative balance sheet (debt-to-equity of 0.25, 58% equity funding) and improving cash generation (NT$20.2bn operating cash flow, NT$8.4bn free cash flow) provide meaningful downside protection. Technicals weigh further on the score, with the price trading below all major moving averages and negative MACD confirming a downtrend, though oversold RSI and Stochastic readings suggest potential for a near-term rebound. A high trailing P/E of 47.6 on near-breakeven earnings limits valuation appeal, only partly offset by a 2.77% dividend yield. Investors should expect continued earnings volatility until panel pricing and utilization push margins durably above breakeven.

Positive Factors

Revenue ReboundThe sharp 2025 revenue rebound shows that Innolux can recover demand across its display markets after a downturn. If the higher sales base persists, it can improve factory utilization, support operating leverage, and provide a foundation for more durable earnings recovery.

Negative Factors

Thin Profit MarginsVery thin margins leave Innolux with little protection against changes in panel pricing, product mix, or operating conditions. Even after the revenue rebound, near break-even profitability means modest cost or demand pressure could materially reduce earnings and limit internally funded growth.

Innolux Corp. (3481) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 320.84B
Dividend Yield: 2.46%
Average Volume (3M): 177.77M
Price to Earnings (P/E): 51.5
Beta (1Y): 1.49
Revenue Growth: 10.66%
EPS Growth: -35.60%
Country: TW
Employees: 44,813
Sector: General
Sector Strength: 55
Industry: Hardware, Equipment & Parts

Innolux Corp. Business Overview & Revenue Model

Company Description

Innolux Corporation, established in Hsinchu City, Taiwan, in 2003, is a leading global entity specializing in the research, development, manufacturing, and sale of advanced display technologies. Renamed from Chimei Innolux Corporation in December 201...

Innolux Corp. Financial Statement Overview

Summary

A mixed picture dominated by weak earnings power. Revenue grew ~5% to NT$226.7bn and gross margin improved to 8.2% from 6.5%, but the company still posted an operating loss of roughly NT$4.2bn and net income collapsed to NT$250mn (0.1% net margin), leaving return on equity near zero. The balance sheet is the key strength: equity funds ~58% of assets and debt-to-equity is a conservative 0.25, though total debt jumped 58% year over year and equity has eroded by more than NT$80bn since 2021. Cash flow is improving, with operating cash flow of NT$20.2bn and free cash flow of NT$8.4bn, confirming heavy depreciation masks underlying cash profitability, but capex still absorbs about 60% of operating cash. Overall, solid solvency and recovering cash generation are offset by sub-breakeven operating profitability and low earnings visibility in a highly cyclical panel market.

Income Statement

33Negative

Balance Sheet

62Positive

Cash Flow

58Neutral

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	244.90B	226.72B	216.51B	211.74B	223.72B	350.08B
Gross Profit	28.33B	18.66B	14.17B	3.11B	-6.91B	91.50B
EBITDA	34.32B	30.98B	40.52B	16.11B	7.15B	99.62B
Net Income	6.21B	249.76M	6.47B	-18.64B	-27.91B	57.53B
Balance Sheet
Total Assets	402.71B	384.29B	358.09B	357.53B	383.74B	467.52B
Cash, Cash Equivalents and Short-Term Investments	99.24B	82.14B	64.82B	63.09B	91.11B	68.66B
Total Debt	64.11B	55.17B	34.82B	43.44B	40.58B	49.39B
Total Liabilities	175.28B	160.82B	124.55B	128.65B	130.75B	162.72B
Stockholders Equity	224.97B	221.33B	231.77B	228.12B	252.48B	304.35B
Cash Flow
Free Cash Flow	18.71B	8.39B	1.48B	-11.80B	-23.04B	73.59B
Operating Cash Flow	28.91B	20.17B	17.53B	9.56B	-1.98B	101.75B
Investing Cash Flow	-28.70B	-34.73B	3.25B	-27.53B	73.30B	-98.42B
Financing Cash Flow	38.55B	10.88B	-17.48B	-1.29B	-31.86B	-528.78M

Innolux Corp. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:3481 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:3034	68Neutral	TWD 292.00B	14.61	―	4.78%	2.41%	13.76%
TW:3406	67Neutral	TWD 107.04B	27.33	―	1.71%	15.85%	24.44%
TW:3081	62Neutral	TWD 214.99B	144.98	―	0.14%	134.16%	529.15%
TW:2301	60Neutral	TWD 515.76B	24.44	―	2.30%	23.65%	55.86%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:3481	45Neutral	TWD 313.18B	51.50	―	2.46%	10.66%	-35.60%
TW:2409	43Neutral	TWD 207.55B	358.13	―	1.40%	-1.07%	-88.79%

* General Sector Average

Performance Comparison

TW:3481 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:3481	Innolux Corp.	40.60	27.60	212.33%
TW:2301	Lite-On Technology Corp.	239.00	78.88	49.26%
TW:2409	AUO Corporation	28.65	16.85	142.86%
TW:3034	Novatek Microelectronics Corp.	481.00	105.63	28.14%
TW:3081	LandMark Optoelectronics Corp.	2215.00	1821.98	463.58%
TW:3406	GeniuS Electronic Optical Co., Ltd.	995.00	560.61	129.05%

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

Innolux Corp. AI Stock Analysis