Tradetool Auto Co. Ltd. (3685) AI Stock Analysis

Tradetool Auto Co. Ltd.

(TPEx:3685)

Select Model

Rating:37Underperform

Price Target:TWD 26.00▼(-2.62% Downside)

Action:initiatedcoverage

Date:11/09/26

Tradetool Auto scores at the low end of the range. The dominant drag is financial performance: three consecutive years of shrinking revenue, a fourth straight annual net loss (NT$81.2m), negative ROE of -11.5%, and an equity base that has eroded roughly a quarter since 2020 while leverage has crept up to 0.88x. Cash generation, though still positive, fell sharply to just NT$32.4m of operating cash flow, leaving a thin buffer against NT$619m of debt. Technicals reinforce the caution — the stock trades below all key moving averages with negative MACD momentum. Valuation provides no cushion given negative earnings and no dividend. The offsetting positive is a genuine operating turnaround: gross margin at a six-year high of 20.8%, operating profit restored to NT$52m, and three straight years of positive free cash flow. Sustained revenue stabilization and a return to bottom-line profitability are the key catalysts needed to lift this score.

Positive Factors

Improving operating profitabilityImproved gross margin and positive operating earnings indicate that the core business generated better operating economics in the latest two reported years. If maintained, this progress can support stronger internal funding, improve resilience, and create a foundation for eventual bottom-line recovery.

Negative Factors

Persistent and widening net lossesFour consecutive years of net losses, including a wider loss in 2025, show that improved operating performance has not yet translated into sustainable bottom-line profitability. Continued losses can consume equity, weaken financing flexibility, and make future investment or growth more difficult to support.

Tradetool Auto Co. Ltd. (3685) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 2.11B
Dividend Yield: ―
Average Volume (3M): 1.29M
Price to Earnings (P/E): -198.4
Beta (1Y): 0.38
Revenue Growth: 17.59%
EPS Growth: 84.52%
Country: TW
Employees: 80
Sector: General
Sector Strength: 55
Industry: Auto - Parts

Tradetool Auto Co. Ltd. Business Overview & Revenue Model

Company Description

Tradetool Auto Co., Ltd., established in 1980 and headquartered in Taichung, Taiwan, operates as a key manufacturer and distributor of various automotive components. The company's core business involves both advanced automotive optics and metal parts...

Tradetool Auto Co. Ltd. Financial Statement Overview

Summary

Weak overall, with only partial offsets. Revenue has contracted for three straight years (NT$1.55bn in 2022 to ~NT$1.20bn, -4% YoY), and the company posted its fourth consecutive annual net loss — NT$81.2m, the widest in six years, for a -6.8% net margin (Income Statement score 29). The genuine bright spot is operational: gross margin expanded to a six-year high of 20.8% from 16.0%, operating profit recovered to NT$52m, and EBITDA margin reached 13.5%. The balance sheet is adequately capitalized but eroding (score 44): equity has fallen from ~NT$957m in 2020 to NT$705m, debt-to-equity has risen to 0.88 from 0.73, and ROE is -11.5%. Cash flow is the weakest link (score 37): operating cash flow collapsed to NT$32.4m from NT$251.6m and free cash flow fell ~65% to NT$17.3m — only ~4% of revenue against a NT$619m debt load, though free cash flow has now been positive three years running and capex is self-funded.

Income Statement

29Negative

Balance Sheet

44Neutral

Cash Flow

37Negative

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.41B	1.20B	1.25B	1.52B	1.55B	1.49B
Gross Profit	306.78M	248.90M	199.12M	265.20M	216.86M	211.98M
EBITDA	213.78M	161.73M	139.50M	113.72M	68.12M	129.74M
Net Income	-12.55M	-81.19M	-41.91M	-61.20M	-59.81M	3.79M
Balance Sheet
Total Assets	2.29B	2.13B	2.21B	2.40B	2.65B	2.37B
Cash, Cash Equivalents and Short-Term Investments	366.13M	395.57M	393.01M	225.60M	343.72M	230.95M
Total Debt	651.50M	618.59M	585.91M	662.13M	795.06M	675.04M
Total Liabilities	1.10B	953.14M	845.17M	1.02B	1.19B	1.04B
Stockholders Equity	732.91M	705.32M	801.15M	830.85M	901.60M	942.31M
Cash Flow
Free Cash Flow	57.62M	17.26M	229.51M	40.77M	-147.83M	-172.16M
Operating Cash Flow	67.66M	32.42M	251.61M	118.41M	54.99M	-57.52M
Investing Cash Flow	-91.15M	23.74M	-1.06M	-44.05M	-242.81M	-161.94M
Financing Cash Flow	56.62M	-46.96M	-127.16M	-136.07M	257.74M	108.43M

Tradetool Auto Co. Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:3685 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:2115	59Neutral	TWD 2.40B	12.56	―	6.54%	13.54%	-9.75%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:2066	49Neutral	TWD 2.08B	12.91	―	4.56%	-2.41%	82.10%
TW:1517	41Neutral	TWD 2.15B	-15.74	―	1.99%	-4.28%	19.85%
TW:2239	40Underperform	TWD 2.09B	-1.93	―	―	-10.18%	-223.51%
TW:3685	37Underperform	TWD 2.23B	-198.44	―	―	17.59%	84.52%
TW:4534	35Underperform	TWD 2.15B	53.16	―	―	15.46%	―

* General Sector Average

Performance Comparison

TW:3685 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:3685	Tradetool Auto Co. Ltd.	26.70	-12.50	-31.89%
TW:1517	Lee Chi Enterprises Co., Ltd.	10.05	-1.67	-14.26%
TW:2066	Sumeeko Industries Co., Ltd.	47.20	-1.33	-2.74%
TW:2115	Lu Hai Holding Corp.	22.95	-1.40	-5.76%
TW:2239	Cayman Engley Industrial Co., Ltd.	17.75	-10.95	-38.15%
TW:4534	Trinity Precision Technology Co., Ltd.	32.11	13.18	69.66%

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

Tradetool Auto Co. Ltd. AI Stock Analysis