Universal Textile Co., Ltd. manufactures and sells fabrics in Taiwan. The company offers polyester filament woven and T/R interweaving fabrics for men and ladies; polyester textured yarns; complex textured yarns; special cross-section polyester filament yarns; and recycled PET products. Universal Textile Co., Ltd. was founded in 1969 and is headquartered in Taipei, Taiwan.

Taiwan

Universal Textile Co., Ltd.

Consumer Cyclical

The company tries to pay dividends regularly but only sometimes does so. It has paid dividends in roughly half the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are somewhat mixed. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. On average, the company pays dividends annually. 

1445.TW reported revenue of TWD 948mn in the last 12 months, down 4% from FY24. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS fell 11% from FY24 to TWD -1.39.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 16ppts over six months and grown 9ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported average EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -9.9% in the last 12 months, a decline from 79.1% in FY23. 

Historically, 1445.TW has reported strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -18.6%, down from 73.0% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to -6.8%, below the peers. 

Universal Textile Co., Ltd. reported a return on equity (RoE) of -7.1% in the last 12 months, down from 46.6% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to -6.1% in the last 12 months, a decrease from 38.5% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.5 in the past several years. This ratio implies a strong shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

1445.TW has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity may be unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note robust profitability, strong debt servicing capacity, adequate interest coverage, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, and negligible return on capital.

In highly turbulent market conditions, 1445.TW is as volatile as an index. In other words, the stock will move with the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be limited. 

In normal market circumstances, 1445.TW is as volatile as an index. Put differently, without outstanding market volatility or shocking company news, the stock's price will move with the index. The stock's losses on its worst days (less than 1-5% of the time) will range from low to minimal. 

From both historical and forecast perspectives, the stock is fairly priced compared to similar stocks. 

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Universal Textile Co., Ltd.

NT$ 13.85

3

Universal Textile Co., Ltd.

NT$ 13.85

3

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NT$ 13.85

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