Lang Inc. manufactures and sells electronic products, communication connectors, and cable components. It offers sockets, connection lines, and remote control products. The company was formerly known as Jye Tai Precision Industrial Co., Ltd. Lang Inc. was founded in 1973 and is headquartered in Taipei, Taiwan.

Taiwan

Lang Inc.

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 been low and below its peers. 

6165.TW reported revenue of TWD 2 926mn in the last 12 months, up 3% from FY24. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS grew 86% from FY24 to TWD 1.93.

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). The stock has outperformed this peer group by 32ppts over past six months and grown 4ppts 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 'fair'.

The company has reported weak EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 7.3% in the last 12 months, up from 5.1% in FY23. 

Historically, 6165.TW has reported weak net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 5.1%, a growth from 0.4% in FY23. 

Lang Inc. reported a return on equity (RoE) of 12.8% in the last 12 months, up from 1.4% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 6.5% in the last 12 months, an increase from 0.6% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 8.9%, above the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.7 in the past several years. This ratio implies a good 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.

6165.TW has poor trading liquidity. The average private investor can sell his common position in the stock in a single trading day. Liquidity is relatively stable and is 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 very 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 resilient historical revenue growth, low margin volatility, 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, bleak profitability, and poor working capital management.

In highly turbulent market conditions, 6165.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, 6165.TW is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from limited to average. 

From both historical and forecast perspectives, the stock is overpriced compared to similar stocks. Specifically, the stock is 'expensive' on P/E, overvalued on EV/EBITDA, overpriced on P/FCF. 

Lang Inc.

NT$ 59.2

4

Lang Inc.

NT$ 59.2

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

NT$ 59.2

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