Li-Cheng Enterprise Co., Ltd (4426) AI Stock Analysis

Li-Cheng Enterprise Co., Ltd

(TWSE:4426)

Select Model

Rating:45Neutral

Price Target:TWD 8.00▼(-9.09% Downside)

Action:initiatedcoverage

Date:11/09/26

The score is held down primarily by severely impaired fundamentals: shrinking revenue, a negative gross margin, a widening net loss of about NT$508m and roughly NT$414m of negative free cash flow, combined with rising leverage (debt-to-equity above 1.2x) and a rapidly thinning equity cushion. Valuation provides no offset, with a negative P/E and no dividend. The main positive is technical: the share price has reclaimed its key moving averages with a positive MACD and neutral RSI, suggesting improving near-term momentum. Taken together, the stock screens as a speculative, high-risk turnaround situation.

Positive Factors

Positive equity basePositive equity gives the company an existing capital base that can absorb part of the impact from operating losses and provides some support for ongoing operations. This does not remove financial pressure, but it is a more durable strength than a business funded entirely by accumulated deficits.

Negative Factors

Sharp revenue contractionA second consecutive year of steep revenue decline indicates a substantial weakening in the company’s operating base rather than a minor quarterly fluctuation. Persistently lower sales reduce scale, make fixed costs harder to absorb, and increase the difficulty of rebuilding sustainable earnings over the next several quarters.

Li-Cheng Enterprise Co., Ltd (4426) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 1.52B
Dividend Yield: ―
Average Volume (3M): 186.33K
Price to Earnings (P/E): -5.6
Beta (1Y): 0.42
Revenue Growth: 9.75%
EPS Growth: 44.51%
Country: TW
Employees: 436
Sector: General
Sector Strength: 55
Industry: Manufacturing - Textiles

Li-Cheng Enterprise Co., Ltd Business Overview & Revenue Model

Company Description

Established in 1992 and based in Douliu, Taiwan, Li Cheng Enterprise Co., Ltd. operates globally as a manufacturer and supplier of spacer fabrics. These specialized textiles are incorporated into a diverse range of products, including athletic footwe...

Li-Cheng Enterprise Co., Ltd Financial Statement Overview

Summary

Financials point to a distressed business. The income statement is the weakest element (score 9): revenue has fallen from roughly NT$1.40bn in 2022 to NT$881m, gross margin has turned negative (-18.5%), the operating margin is near -52.8%, and the net loss widened to about NT$508m (-57.6% net margin), with no profitable year in the available history. Cash flow is similarly poor (score 12): operating cash flow swung to a NT$297m outflow and free cash flow was roughly -NT$414m, the largest burn since 2021, making the company reliant on external funding. The balance sheet is the relative strength (score 31) with NT$4.27bn of assets and NT$1.87bn of equity (~44% of assets), but equity has shrunk nearly 40% since 2020 while debt rose to NT$2.27bn, lifting debt-to-equity to 1.21x and ROE to about -27%. Overall this is a high-risk turnaround rather than a stable operating business.

Income Statement

9Very Negative

Balance Sheet

31Negative

Cash Flow

12Very Negative

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Mar 2023	Dec 2021
Income Statement
Total Revenue	881.50M	880.99M	969.98M	1.29B	1.40B	642.90M
Gross Profit	-127.86M	-163.11M	-34.94M	232.22M	124.17M	-269.18M
EBITDA	-44.18M	-240.33M	51.53M	257.71M	264.27M	-66.31M
Net Income	-313.57M	-507.53M	-235.38M	-41.80M	-79.48M	-371.57M
Balance Sheet
Total Assets	4.12B	4.27B	4.62B	4.77B	4.91B	4.96B
Cash, Cash Equivalents and Short-Term Investments	208.33M	342.64M	602.50M	610.30M	403.27M	880.41M
Total Debt	2.02B	2.27B	2.05B	1.98B	2.05B	2.11B
Total Liabilities	2.37B	2.40B	2.20B	2.11B	2.21B	2.23B
Stockholders Equity	1.74B	1.87B	2.42B	2.66B	2.70B	2.73B
Cash Flow
Free Cash Flow	-201.45M	-413.66M	-37.81M	222.77M	-233.47M	-456.94M
Operating Cash Flow	-89.91M	-296.91M	34.14M	413.87M	104.15M	-153.26M
Investing Cash Flow	-257.96M	-220.38M	-130.83M	-154.16M	-470.98M	-357.68M
Financing Cash Flow	192.44M	206.90M	58.17M	-73.94M	-105.00M	378.24M

Li-Cheng Enterprise Co., Ltd Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:4426 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:1410	58Neutral	TWD 1.57B	36.28	―	0.76%	4.98%	-32.39%
TW:1456	58Neutral	TWD 1.45B	5.12	―	―	255.45%	488.61%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:4420	49Neutral	TWD 1.38B	25.56	―	14.60%	-1.61%	-88.67%
TW:4426	45Neutral	TWD 1.57B	-5.63	―	―	9.75%	44.51%
TW:1449	42Neutral	TWD 1.41B	-48.93	―	―	18.49%	-219.81%
TW:1454	36Underperform	TWD 1.47B	-12.87	―	0.83%	-16.18%	-29.64%

* General Sector Average

Performance Comparison

TW:4426 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:4426	Li-Cheng Enterprise Co., Ltd	8.80	-1.35	-13.30%
TW:1410	Nan Yang Dyeing & Finishing Co. Ltd.	26.45	-7.93	-23.06%
TW:1449	Chia Her Industrial Co., Ltd.	11.00	0.41	3.83%
TW:1454	Taiwan Taffeta Fabric Co., Ltd	12.10	-0.99	-7.58%
TW:1456	I-HWA Industrial Co., Ltd.	14.85	2.65	21.72%
TW:4420	Kwang Ming Silk Mill Co., Ltd.	34.25	-10.75	-23.88%

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

Li-Cheng Enterprise Co., Ltd AI Stock Analysis