Compucase Enterprise Co., Ltd. designs and manufactures PC cases, power supplies, rackmount chassis, and cabinets worldwide. It also manufactures LED Drivers, LED Luminaire, LED panel, switching power and open frame power supplies. The company offers its products under the HEC brand to OEM customers, system integrators, industrial users, and retail customers. Compucase Enterprise Co., Ltd. was founded in 1979 and is headquartered in Tainan City, Taiwan.

Taiwan

Compucase Enterprise Co., Ltd.

Technology

The company pays dividends most of the time. It has paid dividends in almost every one of the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. 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. 

3032.TW reported revenue of TWD 7 402mn in the last 12 months, down 9% from FY23. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS fell 19% from FY23 to TWD 4.61. Market expects EPS to reach TWD 2.98 in FY25.

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 6ppts over six months and grown 6ppts faster 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 modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 12.9% in the last 12 months, a decline from 14.8% in FY23. 

Historically, 3032.TW has reported average net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 7.0%, down from 7.9% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 5.8% in the last 12 months, a decrease from 7.9% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to 11.8%, above the peers. 

Compucase Enterprise Co., Ltd. reported a return on equity (RoE) of 16.6% in the last 12 months, down from 22.8% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.9 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.

3032.TW has below average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is relatively stable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a small 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 strong debt servicing capacity, adequate interest coverage, solid cash flow generation, 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 poor working capital management.

In highly turbulent market conditions, 3032.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, 3032.TW is moderately volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move slightly wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from limited to mild. We would also like to highlight the mild intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is moderately underpriced compared to similar stocks. In particular, the stock is reasonably priced on P/E, of fair value on EV/EBITDA, undervalued on P/FCF. 

Compucase Enterprise Co., Ltd.

NT$ 70.6

5

Compucase Enterprise Co., Ltd.

NT$ 70.6

5

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

NT$ 70.6

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