No Major Surprise in AirTAC’s 2022 Results; Expecting Stronger Recovery in 2023

Narrow-moat AirTAC’s 2022 net profit of TWD 6 billion, down 7% year on year, was in line with our expectation. We raise our fair value estimate to TWD 870 from TWD 770 after rolling forward our estimates and considering the latest guidance given by management. However, we think the shares are not attractive currently following the recent run up in share prices, with positive demand outlook largely priced in. Our valuation for AirTAC implies a 2023 P/E ratio of about 24 times, versus its five-year historical trading range of around 14 times to 40 times.