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
| Metric | Formula | What It Tells You | Data Source |
|---|---|---|---|
| EPS | Net Income / Shares Outstanding | Profitability per share | 公開資訊觀測站 (MOPS) |
| P/E Ratio | Stock Price / EPS | How much market pays per dollar of earnings | Yahoo Finance TW, Goodinfo |
| P/B Ratio | Stock Price / Book Value per Share | Premium to net assets | MOPS |
| Dividend Yield | Annual Dividend / Stock Price | Income return | 公開資訊觀測站 |
| Payout Ratio | Dividends / Net Income | Sustainability of dividends | Calculated |
| ROE | Net Income / Shareholders' Equity | Return on equity | MOPS |
| Debt-to-Equity | Total Debt / Equity | Financial leverage | MOPS |
| Revenue Growth | (Current Rev - Prior Rev) / Prior Rev | Top-line momentum | Monthly revenue reports |
Taiwan-Specific Data Sources
| Source | What It Has | URL |
|---|---|---|
| 公開資訊觀測站 (MOPS) | Financial statements, dividends, insider trading | mops.twse.com.tw |
| 台灣證券交易所 (TWSE) | Stock prices, trading volume, indices | www.twse.com.tw |
| Goodinfo | Historical financials, dividend history, technical data | goodinfo.tw |
| 證交所月營收 | Monthly revenue announcements (by the 10th) | MOPS + news |
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
| Feature | Detail |
|---|---|
| Monthly revenue disclosure | Listed companies report monthly revenue by the 10th — unique to Taiwan, provides more timely data than quarterly reports |
| Dividend culture | Taiwan investors heavily favor dividend stocks. High-yield stocks trade at a premium. |
| Ex-dividend price adjustment | Taiwan stocks drop by the dividend amount on ex-date. This is normal, not a loss. |
| Day trading tax | Securities transaction tax: 0.3% (0.15% for day trades). Factor into short-term trading costs. |
| Foreign investor influence | 外資 (foreign institutional investors) buying/selling data is public and significantly moves stock prices. Monitor 三大法人 (three institutional investors) data. |
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