Formosa Plastics Corporation (1301.TW) stock analysis
In our weekly check, Formosa Plastics Corporation is graded D (A to F). Of 25 checks on debt, profit, cash flow and trend: 9 pass, warnings: 5, red flags: 11.
About Formosa Plastics Corporation
Formosa Plastics Corporation is a Basic Materials company (Chemicals - Specialty) based in Taiwan, listed on TAI as 1301.TW.
What our checks show for 1301.TW
Red flags
- Net debt is 17.9x a year of EBITDA (debt/equity 0.28). That limits room in a downturn and raises refinancing risk.
- Operating profit does not cover the interest bill (-1.2x): interest is paid from cash or new debt.
- The net margin fell by 20 points over 5 years, to 6.1%: the company keeps less of each sale as profit.
- The gross margin fell by 22.6 points, to 5.3%: costs are rising faster than prices.
- Operating cash flow is only 0.34x net profit: part of the reported profit does not arrive as cash.
- Revenue fell 11.9% a year over the last 3 years.
- Free cash flow is negative (-6.2% of revenue): the business spends more cash than it brings in.
- The price swings a lot: 52.3% annual volatility. Expect large ups and downs.
- The stock has fallen as much as 73% from a peak. Would you have held through that?
- Return on capital (ROCE) is zero or negative: the business does not earn on the money put into it.
- Pay in shares equals 0% of free cash flow: it dilutes shareholders.
Warning signs
- Analysts expect only about 2.8% a year of growth in revenue.
- Earnings per share fell 33.9% a year over the last 3 years.
- Net profit fell 33.9% a year over the last 3 years.
- The net margin is only 6.1%: little room if costs rise.
- The stock is still below its previous peak.
Strengths
- Analysts expect earnings per share to grow about 48.6% a year over the next years.
- Analysts expect the net margin to improve by 9.2 points from today's 6.1%.
- The dividend takes 30% of profit: there is a cushion.
- A large company: market value $14.42 billion.
- Beta 0.49: the stock usually moves less than the market.
- Actively traded: about 48.1 million shares a day.
Next earnings report: 2027-01-12
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Questions
What grade does Formosa Plastics Corporation (1301.TW) have?
In our weekly check, Formosa Plastics Corporation is graded D (A to F). Of 25 checks on debt, profit, cash flow and trend: 9 pass, warnings: 5, red flags: 11. The grade is a risk check, not a buy or sell recommendation.
What are the main risks of 1301.TW stock?
This week's biggest flags for Formosa Plastics Corporation: High debt, Weak interest cover, Margins falling. In total 16 of 25 checks show a warning or a red flag.
What does Formosa Plastics Corporation do?
Formosa Plastics Corporation is a Basic Materials company (Chemicals - Specialty) based in Taiwan, listed on TAI as 1301.TW.
When does Formosa Plastics Corporation report earnings next?
The next earnings report is expected on 2027-01-12. We re-run the checks every week, so the grade can change after it.
The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.
Updated 2026-10-24
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