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Advantech Co Ltd 2395

Rating as of

Morningstar’s Analysis

Currency in TWD
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Economic Moat


Capital Allocation


Q1 Results Slightly Ahead of Expectations; Post-Pandemic Recovery on Track

Phelix Lee Equity Analyst

Analyst Note

| Phelix Lee |

While narrow-moat Advantech’s March quarter numbers were slightly ahead of our expectation, we leave our forecasts and fair value estimate of TWD 304 unchanged. The long-term investment thesis business automation has not changed, driven by industrial automation especially in China, and the company’s efforts to strengthen specialized modules for retail, logistics, smart city, and healthcare. Although we are confident about Advantech’s long-term thesis, we view the stock to be overvalued, as the market appears to price order fulfillment with little regard to component shortage and overestimates the scalability of service Internet of Things, or SIoT, offerings, which are more customized than conventional software-as-a-service, or SaaS.

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Company Profile

Business Description

Founded in 1981, Advantech is the world’s largest industrial PC, or IPC, supplier, offering single-board computers, fanless IPCs, digital posts and more. The company reports three segments: embedded PCs, industry PC and automation solutions, and service and others, they contributed 48%, 41% and 11% revenue in 2019 respectively. Leveraging its presence in 26 countries, Advantech is expanding into Internet of Things verticals like smart retail, medical, transportation, industrial automation and energy by investing in Internet of Things solution partners and its proprietary WISE-PaaS platform. The headquarters is in Taipei, Taiwan. The company maintains most manufacturing facilities in Taiwan and Kunshan, China; and has 14 service centers globally.

No. 1, Alley 20, Lane 26, Rueiguang Road, Neihu District
Taipei, 11491, Taiwan
T +886 227927818
Sector Technology
Industry Computer Hardware
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type
Employees 6,454

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