AirTAC’s Q3 2022 Results Trail Expectation; Management Cuts 2022 Guidance Again

Narrow-moat AirTAC’s third-quarter 2022 net profit of TWD 1.39 billion was down 13% year on year and below our expectation. We lower our fair value estimate to TWD 770 from TWD 860 after considering lower sales and margin guidance from management. While we think the firm’s valuation is not expensive currently, we believe its share price performance will remain volatile in the near term given the murky demand outlook. Our valuation for AirTAC implies a 2023 P/E ratio of about 21 times, versus its five-year historical trading range of around 14 times to 40 times.