Airtac International Group

1590: XTAI (TWN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	TWD 325.00	Czhxmx	Zbdtbvpgg

AirTAC Earnings: Linear Guide Sales Below Expectation but Improvement Expected in 2024

Chokwai Lee

Oct 26, 2023

Narrow-moat AirTAC’s cumulative nine-month net profit of TWD 5.27 billion was up 13% year on year and in line with our expectation. We slightly raise our fair value estimate to TWD 900 from TWD 870 after considering a better sales growth outlook in 2024-25. However, we think the shares remain overvalued currently, with a positive demand outlook largely priced in. In our view, the market could be disappointed with the slower-than-expected sales growth for its linear guide products. Our valuation for AirTAC implies a 2024 P/E ratio of about 21 times, versus its five-year historical trading range of around 14 times to 40 times.

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