AirTAC’s Q1 Results Broadly In Line; FVE Unchanged; Near-Term Uncertainty From COVID-19 Control

Narrow-moat AirTAC’s first-quarter 2022 net profit of TWD 1.68 billion, up 16% year on year, was aided by a foreign exchange gain of TWD 376 million and largely within our expectation. We keep our fair value estimate at TWD 910. While we think the firm is not expensive currently, we believe near-term sentiment could be affected by the resurgence of COVID-19 cases in China. Our valuation for AirTAC implies a 2022 P/E ratio of 23.5 times, roughly in the middle of its five-year historical trading range of around 14 times to 40 times.