Tw Stock Analysis

Taiwan Stock Fundamental Analysis

Framework

IRON LAW: Valuation Is Relative — Compare to Peers and History

A P/E of 20 is cheap for a growth tech stock but expensive for a mature
utility. ALWAYS compare to: (1) industry peers, (2) the stock's own
historical range, and (3) the broader market (TAIEX average P/E ~14-18).
A single number in isolation is meaningless.

Key Metrics for Taiwan Stocks

Taiwan-Specific Data Sources

Analysis Steps

Phase 1: Business Understanding

• What does the company do? Which industry/sector?
• Who are the main competitors?
• What drives revenue? (products, segments, geographies)

Phase 2: Financial Health

• Revenue trend (monthly data unique to Taiwan market — check 月營收)
• Profitability: EPS trend, operating margin trend
• Balance sheet: D/E ratio, current ratio, cash position
• Cash flow: operating CF positive? Free cash flow trend?

Phase 3: Valuation

• P/E vs peers, vs own 5-year range, vs TAIEX average
• P/B vs peers (especially for asset-heavy industries)
• Dividend yield vs peers and vs Taiwan 10-year bond yield (~1.5%)

Phase 4: Growth & Risk

• Revenue growth rate vs industry
• Capex plans (MOPS announcements)
• Concentration risk (customer, product, geography)
• Regulatory and geopolitical risks

Taiwan Market Specifics

Output Format

# Stock Analysis: {Company Name} ({Stock Code})

## Company Overview
- Industry: {sector}
- Market cap: NT${X}B
- Main business: {description}

## Financial Summary
| Metric | Current | 3-Year Avg | Peer Avg | Assessment |
|--------|---------|-----------|---------|-----------|
| EPS | NT${X} | NT${X} | NT${X} | Above/Below |
| P/E | {X}x | {X}x | {X}x | Cheap/Fair/Expensive |
| Dividend Yield | {%} | {%} | {%} | ... |
| ROE | {%} | {%} | {%} | ... |
| D/E | {X} | {X} | {X} | ... |

## Revenue Trend (Monthly)
| Month | Revenue (NT$M) | YoY Growth |
|-------|-------------|-----------|
| {month} | {amount} | {%} |

## Valuation Assessment
{Cheap / Fair / Expensive — with rationale comparing to peers and history}

## Key Risks
1. {risk}

## Investment Thesis
{Bull case vs bear case in 2-3 sentences each}

Gotchas

• EPS can be distorted by one-time items: Check if EPS includes asset sales, legal settlements, or write-offs. Use "recurring EPS" (本業 EPS) for trend analysis.
• Monthly revenue ≠ profitability: A company growing revenue 30% might have declining margins. Revenue growth without margin analysis is incomplete.
• Dividend yield trap: A stock yielding 8% may be cheap for a reason (declining business, unsustainable payout). Check if the payout ratio > 80% — that may not be sustainable.
• Taiwan stock prices adjust for dividends: Unlike US stocks, Taiwan stock prices drop by the cash dividend amount on ex-date. A NT$100 stock paying NT$5 opens at NT$95. This is not a loss — you received NT$5 in cash.
• This is educational analysis, not investment advice: All investment carries risk. Past performance does not predict future results. Consult a licensed financial advisor.

References

• For DCF valuation methodology, see the biz-dcf skill
• For financial ratio deep-dive, see the biz-financial-ratios skill