Chung Hwa Food Industrial Co., Ltd. (4205) AI Stock Analysis

Chung Hwa Food Industrial Co., Ltd.

(TPEx:4205)

Select Model

Rating:73Outperform

Price Target:TWD 72.00▲(12.15% Upside)

Action:initiatedcoverage

Date:11/09/26

Chung Hwa Food earns a solid score driven primarily by high-quality financials: industry-leading margins, six straight years of profit growth, a virtually debt-free balance sheet and strong cash conversion. An attractive 5.4% dividend yield on a modest 16.4x earnings multiple adds support for income-oriented investors. The score is held back by persistently weak technicals — the shares trade below every major moving average with negative MACD, though deeply oversold readings hint at near-term stabilisation — and by slowing revenue growth and a gradually eroding return on equity. Overall, this is a low-risk, defensive cash generator rather than a growth story.

Positive Factors

Strong ProfitabilityHigh gross and net margins indicate that Chung Hwa Food retains substantial value from its packaged-food sales after production and operating costs. Resilient profitability provides a durable buffer against moderate demand pressure and supports continued reinvestment, dividends, and cash generation.

Negative Factors

Revenue ContractionThe reversal from several years of growth to an approximately 8% revenue decline signals weaker top-line momentum for the packaged-food business. If demand, pricing, or volume pressure persists, slower sales can limit operating leverage and eventually challenge the company’s otherwise strong profit profile.

Chung Hwa Food Industrial Co., Ltd. (4205) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 6.35B
Dividend Yield: 5.45%
Average Volume (3M): 29.31K
Price to Earnings (P/E): 16.3
Beta (1Y): 0.09
Revenue Growth: 0.29%
EPS Growth: -7.81%
Country: TW
Employees: 289
Sector: General
Sector Strength: 55
Industry: Packaged Foods

Chung Hwa Food Industrial Co., Ltd. Business Overview & Revenue Model

Company Description

Chung Hwa Food Industrial Co., Ltd. specializes in the production and sale of soya-based food items across Taiwan. Its diverse product portfolio encompasses bean curd (tofu) varieties, sweet treats, various rolls, and components for hot pots. The com...

Chung Hwa Food Industrial Co., Ltd. Financial Statement Overview

Summary

Chung Hwa Food combines premium profitability with fortress-like finances. Gross margin near 40%, operating margin close to 25% and net margin around 20% are well above typical packaged-food norms, and net income has risen for six consecutive years to roughly NT$404 million. The balance sheet is effectively debt-free (debt-to-equity of 0.05) with equity funding about 85% of assets, while operating cash flow of roughly NT$457 million exceeds net income by 1.39x and free cash flow grew over 20% to about NT$353 million. Offsetting these strengths are decelerating revenue growth (only ~2% in 2025), a gradually declining ROE (~17.4% from ~21%) that signals under-deployed capital, and lumpy capex that can periodically compress free cash flow.

Income Statement

81Very Positive

Balance Sheet

90Very Positive

Cash Flow

85Very Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.06B	2.06B	2.02B	1.95B	1.84B	1.72B
Gross Profit	793.30M	824.20M	795.26M	717.67M	728.62M	704.77M
EBITDA	528.43M	553.62M	524.87M	461.42M	472.19M	441.33M
Net Income	387.82M	404.48M	395.38M	346.93M	352.73M	333.73M
Balance Sheet
Total Assets	2.87B	2.75B	2.52B	2.39B	2.29B	2.17B
Cash, Cash Equivalents and Short-Term Investments	1.51B	1.38B	1.20B	1.18B	1.22B	1.32B
Total Debt	91.23M	107.00M	98.78M	123.85M	91.37M	90.68M
Total Liabilities	699.07M	424.65M	417.75M	417.03M	398.39M	369.04M
Stockholders Equity	2.17B	2.33B	2.10B	1.97B	1.89B	1.80B
Cash Flow
Free Cash Flow	372.54M	352.92M	287.82M	215.11M	159.77M	283.82M
Operating Cash Flow	429.23M	456.98M	410.88M	386.43M	352.21M	354.80M
Investing Cash Flow	-56.09M	-105.44M	-124.54M	-168.53M	-195.91M	-73.35M
Financing Cash Flow	-178.11M	-178.24M	-268.92M	-258.51M	-262.30M	-163.12M

Chung Hwa Food Industrial Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:4205 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:1268	76Outperform	TWD 7.11B	12.82	―	4.69%	15.59%	36.03%
TW:4205	73Outperform	TWD 6.27B	16.35	―	5.45%	0.29%	-7.81%
TW:1256	63Neutral	TWD 5.90B	8.82	―	4.00%	38.21%	95.88%
TW:1225	58Neutral	TWD 6.06B	125.00	―	0.50%	-4.19%	-84.08%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:1201	50Neutral	TWD 6.22B	20.01	―	1.71%	-4.41%	-18.82%
TW:1218	49Neutral	TWD 6.15B	-18.33	―	10.43%	-0.80%	-147.57%

* General Sector Average

Performance Comparison

TW:4205 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:4205	Chung Hwa Food Industrial Co., Ltd.	64.20	-17.20	-21.13%
TW:1201	Wei Chuan Foods Corp.	12.30	-2.55	-17.17%
TW:1218	Taisun Enterprise Co., Ltd.	12.65	-4.44	-25.97%
TW:1225	Formosa Oilseed Processing Co., Ltd.	25.00	-5.80	-18.83%
TW:1256	Sunjuice Holdings Co., Ltd.	165.00	23.83	16.88%
TW:1268	Hi-Lai Foods Co., Ltd.	170.50	18.97	12.52%

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

Chung Hwa Food Industrial Co., Ltd. AI Stock Analysis