Paragon Technologies Co., Ltd. (3518) AI Stock Analysis

Paragon Technologies Co., Ltd.

(TWSE:3518)

Select Model

Rating:40Underperform

Price Target:TWD 28.00▼(-12.50% Downside)

Action:initiatedcoverage

Date:11/09/26

Paragon Technologies scores poorly, driven primarily by deteriorating fundamentals: a four-year revenue decline, gross margins collapsing to single digits, three consecutive years of losses, and record cash burn with free cash flow at negative NT$713m funded by rapidly rising debt. The equity base still provides some cushion, but leverage is climbing while equity shrinks. Technicals reinforce the caution, with the price below all key moving averages and a negative MACD, although oversold RSI and Stochastic readings hint at scope for a short-term bounce. Valuation offers little support, as the low headline P/E is unreliable for a loss-making business paying no dividend. A sustained re-rating would require revenue stabilization, margin recovery and a return to positive operating cash flow.

Positive Factors

Equity BufferA meaningful equity base gives Paragon a cushion against operating volatility and supports continued business activity while management addresses weak results. This buffer can reduce immediate financial strain, although its protection is weakened by rising leverage and ongoing losses.

Negative Factors

Contracting RevenueSeveral consecutive years of revenue contraction point to sustained pressure on demand, customer volumes, or product competitiveness rather than a brief quarterly setback. A shrinking sales base reduces operating leverage, limits reinvestment capacity, and makes a durable return to profitability more difficult.

Paragon Technologies Co., Ltd. (3518) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 3.04B
Dividend Yield: ―
Average Volume (3M): 2.56M
Price to Earnings (P/E): 29.3
Beta (1Y): 1.32
Revenue Growth: -21.71%
EPS Growth: ―
Country: TW
Employees: 775
Sector: General
Sector Strength: 55
Industry: Hardware, Equipment & Parts

Paragon Technologies Co., Ltd. Business Overview & Revenue Model

Company Description

Paragon Technologies specializes in the manufacturing and distribution of vacuum sputtering products, which includes solutions for electromagnetic interference (EMI) and electrostatic discharge (ESD) protection. The company provides a range of 3C fun...

Paragon Technologies Co., Ltd. Financial Statement Overview

Summary

Very weak across all three statements. Revenue has declined four years in a row (NT$800m in 2021 to NT$320m latest, -3.5% YoY) while gross margin collapsed to 6.8%, producing an operating loss of NT$157m (-49% margin) and a net loss of NT$149m. Cash flow is the biggest concern: operating cash flow was negative NT$100m and heavy capex drove free cash flow to a record negative NT$713m, forcing reliance on borrowings. The balance sheet is the relative strength, with equity still funding ~62% of assets, but debt has risen five-fold in three years (D/E 0.10 to 0.52) while equity erodes on accumulated losses and ROE sits at -10.7%. A narrower net loss versus last year is the only modest positive.

Income Statement

14Very Negative

Balance Sheet

38Negative

Cash Flow

9Very Negative

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	276.94M	319.90M	353.99M	382.57M	457.22M	800.10M
Gross Profit	-16.00M	21.72M	70.88M	66.05M	113.34M	291.90M
EBITDA	-154.13M	-90.93M	-67.79M	76.44M	122.87M	208.29M
Net Income	218.31M	-149.39M	-212.09M	-48.41M	25.05M	41.26M
Balance Sheet
Total Assets	2.44B	2.25B	2.18B	1.56B	1.78B	1.88B
Cash, Cash Equivalents and Short-Term Investments	1.03B	822.47M	1.30B	858.11M	1.10B	920.31M
Total Debt	569.04M	724.30M	601.67M	239.64M	145.15M	270.09M
Total Liabilities	733.99M	842.08M	728.50M	335.51M	289.96M	461.00M
Stockholders Equity	1.71B	1.40B	1.45B	1.23B	1.41B	1.42B
Cash Flow
Free Cash Flow	-259.26M	-712.88M	-233.46M	-121.87M	100.62M	91.96M
Operating Cash Flow	125.56M	-100.24M	-105.23M	-51.43M	145.13M	117.34M
Investing Cash Flow	-123.21M	-649.93M	-290.05M	-122.43M	176.87M	306.61M
Financing Cash Flow	1.92M	121.66M	631.39M	126.18M	-170.89M	-365.76M

Paragon Technologies Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:3518 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:3168	63Neutral	TWD 3.09B	13.11	―	7.38%	14.17%	21.79%
TW:3038	60Neutral	TWD 2.87B	15.37	―	6.43%	-9.99%	1.97%
TW:3051	60Neutral	TWD 3.22B	9.90	―	2.54%	0.82%	73.31%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:3580	47Neutral	TWD 3.49B	53.58	―	1.40%	-19.96%	-63.63%
TW:3518	40Underperform	TWD 3.23B	29.27	―	―	-21.71%	―

* General Sector Average

Performance Comparison

TW:3518 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:3518	Paragon Technologies Co., Ltd.	32.00	11.80	58.42%
TW:3038	Emerging Display Technologies Corp	18.65	-1.56	-7.73%
TW:3051	Optimax Technology Corporation	19.65	0.44	2.31%
TW:3168	Data Image Corporation	40.65	-0.64	-1.54%
TW:3580	UVAT Technology Co., Ltd.	86.00	28.17	48.70%
TW:6775	Entire Technology Co Ltd	28.60	-0.73	-2.51%

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

Paragon Technologies Co., Ltd. AI Stock Analysis