WINSON Machinery Co., Ltd. (4538) AI Stock Analysis

WINSON Machinery Co., Ltd.

(TPEx:4538)

Select Model

Rating:55Neutral

Price Target:TWD 16.50▲(2.80% Upside)

Action:initiatedcoverage

Date:11/09/26

Winson earns a middling score. Its greatest strength is financial resilience — no debt, equity funding over 90% of assets, and NT$86M of free cash flow — which underpins a compelling 6.3% dividend yield. However, earnings quality is the key constraint: gross margin has eroded for three consecutive years to 15.8%, net margin is just 4.6%, and return on equity is only 2.0%, leaving a large equity base underutilised and the P/E at an elevated 42.2x. Technicals add further caution, with the price below all major moving averages and MACD negative, although deeply oversold readings suggest the selling may be stretched. A re-rating likely requires evidence of margin recovery and more productive deployment of the company's idle capital.

Positive Factors

Very low leverageDebt-to-equity near zero and a large equity-funded asset base reduce balance-sheet strain and preserve financial flexibility. This conservative funding profile can help WINSON withstand operating volatility while retaining capacity to support operations without heavy reliance on borrowing.

Negative Factors

Volatile revenue and marginsThe sharp margin compression and uneven revenue history show that profitability has not been consistently durable. Lower earnings retention reduces the company’s ability to compound internally generated funds and leaves results more exposed to recurring operating cyclicality.

WINSON Machinery Co., Ltd. (4538) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 948.54M
Dividend Yield: 6.25%
Average Volume (3M): 20.78K
Price to Earnings (P/E): 42.2
Beta (1Y): 0.20
Revenue Growth: 13.83%
EPS Growth: 126.75%
Country: TW
Employees: 104
Sector: General
Sector Strength: 55
Industry: Manufacturing - Metal Fabrication

WINSON Machinery Co., Ltd. Business Overview & Revenue Model

Company Description

Headquartered in Changhua, Taiwan, WINSON Machinery Co., LTD. specializes in manufacturing and distributing a diverse range of castings across the region. The company provides critical components for various applications, including machine tools and...

WINSON Machinery Co., Ltd. Financial Statement Overview

Summary

A tale of two halves. The balance sheet is exceptionally strong (score 85): zero debt after fully repaying borrowings, with equity funding roughly 93% of the NT$940M asset base — ample capacity to absorb a downturn or self-fund growth. Cash flow is also solid (score 70), with operating cash flow of NT$100.2M and free cash flow of NT$85.7M in 2025, a second consecutive year of healthy surplus, though much of it is driven by depreciation rather than operating profit and the multi-year record is capex-cycle dependent. The income statement is the clear weak link (score 42): revenue rebounded about 20% to NT$380M but remains ~37% below the 2022 peak, gross margin has compressed for three straight years to 15.8%, net margin is just 4.6%, and return on equity is only 2.0% — a large equity base generating modest returns.

Income Statement

42Neutral

Balance Sheet

85Very Positive

Cash Flow

70Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Mar 2024	Mar 2023	Dec 2021
Income Statement
Total Revenue	394.92M	379.79M	315.31M	434.68M	607.63M	462.59M
Gross Profit	56.14M	60.09M	57.33M	105.41M	140.73M	88.05M
EBITDA	54.77M	55.96M	43.59M	109.50M	132.84M	87.47M
Net Income	23.34M	17.33M	11.15M	61.34M	80.18M	38.59M
Balance Sheet
Total Assets	938.48M	940.35M	939.29M	984.67M	1.00B	786.48M
Cash, Cash Equivalents and Short-Term Investments	303.01M	298.47M	288.87M	297.51M	251.81M	38.96M
Total Debt	25.00M	0	25.18M	46.08M	139.32M	0
Total Liabilities	111.86M	67.08M	71.95M	104.31M	251.34M	96.67M
Stockholders Equity	826.62M	873.28M	867.34M	880.36M	752.92M	689.82M
Cash Flow
Free Cash Flow	53.13M	85.67M	78.40M	-15.62M	76.17M	-19.02M
Operating Cash Flow	74.39M	100.22M	98.88M	39.99M	121.59M	19.89M
Investing Cash Flow	10.47M	-106.67M	-53.55M	-147.92M	-65.85M	7.82M
Financing Cash Flow	-71.28M	-36.81M	-46.02M	-30.27M	125.90M	-40.37M

WINSON Machinery Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:4538 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:4550	60Neutral	TWD 893.00M	12.23	―	5.17%	-2.99%	-33.42%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:4538	55Neutral	TWD 951.51M	42.20	―	6.25%	13.83%	126.75%
TW:1539	44Neutral	TWD 941.33M	17.14	―	5.90%	-16.53%	―
TW:4558	43Neutral	TWD 847.50M	19.09	―	―	10.33%	―
TW:4502	37Underperform	TWD 900.72M	-22.64	―	―	-5.95%	-25.08%

* General Sector Average

Performance Comparison

TW:4538 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:4538	WINSON Machinery Co., Ltd.	16.05	-0.28	-1.70%
TW:1539	Chiu Ting Machinery Co., Ltd.	14.40	-2.80	-16.28%
TW:4502	Jian Sin Industrial Co., Ltd.	15.85	-0.30	-1.86%
TW:4550	Chang Jia M&E Engineering Corp.	23.65	0.25	1.09%
TW:4558	Alformer Industrial Co Ltd	17.95	-2.50	-12.22%
TW:4589	Motion Technology Electric & Machinery Co. Ltd.	42.00	5.98	16.59%

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

WINSON Machinery Co., Ltd. AI Stock Analysis