TSEC:1301

Stock Analysis Report

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Executive Summary

Formosa Plastics Corporation produces and sells intermediate raw materials for plastics in Taiwan, Mainland China, and internationally.


Snowflake Analysis

Flawless balance sheet second-rate dividend payer.


Similar Companies

Share Price & News

How has Formosa Plastics's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1301 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

5.5%

1301

4.1%

TW Chemicals

4.7%

TW Market


1 Year Return

-20.4%

1301

-19.2%

TW Chemicals

10.4%

TW Market

Return vs Industry: 1301 underperformed the TW Chemicals industry which returned -19.2% over the past year.

Return vs Market: 1301 underperformed the TW Market which returned 10.4% over the past year.


Shareholder returns

1301IndustryMarket
7 Day5.5%4.1%4.7%
30 Day2.7%3.5%7.0%
90 Day-4.2%-3.8%1.9%
1 Year-16.1%-20.4%-14.7%-19.2%15.4%10.4%
3 Year13.6%-2.7%5.7%-9.4%26.2%11.5%
5 Year50.7%20.3%25.2%-0.2%50.5%23.1%

Price Volatility Vs. Market

How volatile is Formosa Plastics's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Formosa Plastics undervalued compared to its fair value and its price relative to the market?

20.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 1301 (NT$87.6) is trading below our estimate of fair value (NT$110.1)

Significantly Below Fair Value: 1301 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1301 is poor value based on its PE Ratio (19.4x) compared to the Chemicals industry average (17.9x).

PE vs Market: 1301 is poor value based on its PE Ratio (19.4x) compared to the TW market (17.9x).


Price to Earnings Growth Ratio

PEG Ratio: 1301 is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: 1301 is overvalued based on its PB Ratio (1.8x) compared to the TW Chemicals industry average (1.2x).


Next Steps

Future Growth

How is Formosa Plastics forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

17.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1301's forecast earnings growth (17.1% per year) is above the savings rate (0.9%).

Earnings vs Market: 1301's earnings (17.1% per year) are forecast to grow faster than the TW market (15.2% per year).

High Growth Earnings: 1301's earnings are forecast to grow, but not significantly.

Revenue vs Market: 1301's revenue (6.8% per year) is forecast to grow slower than the TW market (7.4% per year).

High Growth Revenue: 1301's revenue (6.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1301's Return on Equity is forecast to be low in 3 years time (9.8%).


Next Steps

Past Performance

How has Formosa Plastics performed over the past 5 years?

10.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1301 has high quality earnings.

Growing Profit Margin: 1301's current net profit margins (14.6%) are lower than last year (20%).


Past Earnings Growth Analysis

Earnings Trend: 1301's earnings have grown by 10.5% per year over the past 5 years.

Accelerating Growth: 1301's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1301 had negative earnings growth (-37%) over the past year, making it difficult to compare to the Chemicals industry average (-20%).


Return on Equity

High ROE: 1301's Return on Equity (9.3%) is considered low.


Next Steps

Financial Health

How is Formosa Plastics's financial position?


Financial Position Analysis

Short Term Liabilities: 1301's short term assets (NT$151.0B) exceed its short term liabilities (NT$90.4B).

Long Term Liabilities: 1301's short term assets (NT$151.0B) exceed its long term liabilities (NT$58.5B).


Debt to Equity History and Analysis

Debt Level: 1301's debt to equity ratio (32.9%) is considered satisfactory.

Reducing Debt: 1301's debt to equity ratio has reduced from 33.7% to 32.9% over the past 5 years.

Debt Coverage: 1301's debt is well covered by operating cash flow (35.3%).

Interest Coverage: 1301 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is Formosa Plastics's current dividend yield, its reliability and sustainability?

5.02%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 1301's dividend (5.02%) is higher than the bottom 25% of dividend payers in the TW market (2.46%).

High Dividend: 1301's dividend (5.02%) is low compared to the top 25% of dividend payers in the TW market (5.48%).


Stability and Growth of Payments

Stable Dividend: 1301's dividend payments have been volatile in the past 10 years.

Growing Dividend: 1301's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (97.3%), 1301's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 1301's dividends in 3 years are forecast to be covered by earnings (72.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.9yrs

Average management tenure


CEO

Jason Lin

no data

Tenure

Mr. Jaing-Nan Lin, also known as Jason, has been President of Formosa Plastics Corporation, U.S.A. since July 28, 2017. Mr. Lin serves as the Chairman and President of Formosa Plastics Corporation and serv ...


Leadership Team

NamePositionTenureCompensationOwnership
Jaing-Nan Lin
Chairman & Presidentno datano datano data
Zhen-Xiao Lei
Vice President of Finance Divisionno datano datano data
Chia-Tse Zhang
Chief Accountant4.5yrsno datano data
Wen-Chiao Wang
MD & Executive Directorno datano data0.78% NT$4.4b
Ruey-Yu Wang
MD & Executive Directorno datano data0.14% NT$773.3m
Wen-Yuan Wong
MD & Executive Directorno datano data0.73% NT$4.1b
Jerry Lin
Senior VP & Director1.42yrsno datano data
King-Long Huang
Executive Vice President & Directorno datano data0.00016% NT$892.2k
Cheng-Chung Cheng
Senior VP & Directorno datano datano data
Ching-Lian Huang
Vice President of Plastics Division & Directorno datano datano data

3.9yrs

Average Tenure

Experienced Management: 1301's management team is considered experienced (3.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Formosa Plastics Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Formosa Plastics Corporation
  • Ticker: 1301
  • Exchange: TSEC
  • Founded: 1954
  • Industry: Commodity Chemicals
  • Sector: Materials
  • Market Cap: NT$557.639b
  • Shares outstanding: 6.37b
  • Website: https://www.fpc.com.tw

Location

  • Formosa Plastics Corporation
  • No. 100, Shuiguan Road
  • Renwu District
  • Kaohsiung
  • 814
  • Taiwan

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1301TSEC (Taiwan Stock Exchange)YesCommon StockTWTWDJan 1992

Biography

Formosa Plastics Corporation produces and sells intermediate raw materials for plastics in Taiwan, Mainland China, and internationally. Its plastic products include PVC resins, high density polyethylene resins, linear low density polyethylene resins, ethylene vinyl acetate copolymer resins, PE wax, polypropylene (PP), polyoxymethylene, and PP or PE-based masterbatches. The company also provides chemicals, such as liquid caustic soda, caustic soda solid, liquid chlorine, vinyl chloride monomers, ethylene dichloride, acrylonitrile, acetonitrile, methyl methacrylate, methacrylic acid, epichlorohydrin, methyl tertiary butyl ether, acrylic acid and esters, SAP chemicals, and n-butanol; and petrochemical products. In addition, it offers carbon fibers; electronic products comprising distributed control systems, WMS, real-time production management systems, SCS-2000, and laboratory information management systems; and other products, including processing aids, methyl methacrylate-butadiene-styrene, sodium hypochlorite, chlorinated solvents, hydrogen, lithium-ion battery electrolytes, lime, calcium carbonate, and hydrochloric acid. The company provides its products for use in various applications, such as household items, outdoor sports, mechanical engineering, building materials coatings, 3C appliances, civil farm animals, and other applications. Formosa Plastics Corporation was founded in 1954 and is headquartered in Kaohsiung City, Taiwan. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/06 15:54
End of Day Share Price2020/06/05 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.