Bestec Power Electronics Co., Ltd. engages in the design, fabrication, marketing, and sale of switching power supply products worldwide. It offers chargers, adapters, and uninterruptible power systems. The company was founded in 1988 and is headquartered in Taoyuan City, Taiwan.

Taiwan

Bestec Power Electronics Co., Ltd.

Industrials

The company pays dividends on rare occasions. There have only been a few years with dividend payments in 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. 

3308.TW reported revenue of TWD 38mn in the last 12 months, down 44% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 45% from FY24 to TWD 1.44.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 26ppts and its growth decelerated by 4ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

Another important profitability metric, return on assets (RoA), amounted to 4.0% in the last 12 months, a decrease from 19.4% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to 5.6%, below the peers. 

Bestec Power Electronics Co., Ltd. reported a return on equity (RoE) of 7.7% in the last 12 months, down from 43.2% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.2 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.

3308.TW has very poor trading liquidity. It will take at least a day or two for the average private investor to sell a common position under normal market conditions. Liquidity is very unstable and is 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 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, solid return on capital, and adequate interest coverage, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, excessive margin volatility, and poor working capital management.

In highly turbulent market conditions, 3308.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, 3308.TW is highly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change somewhat erratically. The stock's losses on its worst days (less than 1-5% of the time) will range from large to immense. 

Based on key historical and expected multiples, the stock is fairly valued relative to its peers. Specifically, the stock is 'cheap' on P/E, neutral on EV/EBITD. 

Bestec Power Electronics Co., Ltd.

NT$ 18.4

3

Bestec Power Electronics Co., Ltd.

NT$ 18.4

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

NT$ 18.4

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