Company Reports

AirTAC is the second-largest pneumatic components maker in China, with 27% market share in 2023. We think the firm’s leadership position is underpinned by its reputable brand, established track record, comprehensive sales and service network, and strong operating efficiency.

AirTAC’s second-quarter result fell short of our expectations. While revenue grew 5% year on year, sales turned negative in June and remained soft in July. AirTAC still aims for high-single-digit percentage sales growth in 2024, with support from potential policy stimulus in China in the second half, but this has been lowered from original double-digit percentage growth guidance. We're not as optimistic as this would necessitate sales growth exceeding 10% year over year in the latter half, which seems unlikely given the continued significant decline in shipments to the battery and solar industries. As such, we reduce our revenue forecasts by 7% to TWD 31.3 billion for 2024 and by 3%-5% for 2025-28, leading to a 7% decline in our 2024 net income estimate and 3%-4% decline for 2025-28. Consequently, we reduce our fair value estimate by 3% to TWD 930. Given the current share price is slightly above our fair value estimate we recommend waiting for a more attractive entry point.

We transfer coverage of AirTAC and keep our narrow moat rating and fair value estimate of TWD 960 per share. We think AirTAC’s moat is underpinned by intangible assets, including a reputable brand, track record, as well as an extensive sales and service network. The shares are currently trading 21% above our fair value estimate. We think the growth prospect has been fully priced in and suggest that investors wait for better entry points.

AirTAC is the second-largest pneumatic components maker in China, with 27% market share in 2023. We think the firm’s leadership position is underpinned by its reputable brand, established track record, comprehensive sales and service network, and strong operating efficiency.

There is no major surprise in narrow-moat AirTAC’s 2023 results, with net profit up 16% year on year to TWD 6.97 billion. We raise our fair value estimate to TWD 960 from TWD 900 after rolling forward our estimates and incorporating the guidance given by management. We think the shares are fairly valued currently, with stronger sales of linear guide products in 2024 largely priced in. Our valuation for AirTAC implies a 2024 P/E ratio of about 23 times, versus its five-year historical trading range of around 17 times to 40 times.

AirTAC is the second-largest pneumatic components maker in China, with more than 20% market share in 2022. We think the firm’s leadership position is underpinned by its reputable brand, record, comprehensive sales network, and strong operating efficiency.

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.

AirTAC is the second-largest pneumatic components maker in China, with more than 20% market share in 2022. We think the firm’s leadership position is underpinned by its reputable brand, record, comprehensive sales network, and strong operating efficiency.

Narrow-moat Airtac’s first-half 2023 net profit was up 1% year on year to TWD 3.3 billion. Stripping out foreign exchange losses of TWD 236.9 million due to the depreciation of the Chinese yuan, we view the result as broadly in line with our expectation. Nonetheless, operating margin of 30% was below forecast due to lower utilization rate for its linear guide products. We cut our 2023 earnings by 6% to factor in the latest numbers, but our longer-term forecasts are largely unchanged. We maintain our fair value estimate at TWD 870, and we think the shares are fairly valued currently. Our valuation for Airtac implies a 2023 P/E ratio of about 25 times, versus its five-year historical trading range of around 14 times to 40 times.

AirTAC is the second-largest pneumatic components maker in China, with more than 20% market share in 2022. We think the firm’s leadership position is underpinned by its reputable brand, record, comprehensive sales network, and strong operating efficiency.

Narrow-moat AirTAC’s first-quarter net profit of TWD 1.6 billion, down 3% year on year, was mainly due to lower foreign exchange gain and a disposal loss. Meanwhile, operating profit rose 13% year on year and was in line with our expectation. We keep our fair value estimate at TWD 870, and we think the shares are expensive currently, 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.

AirTAC is the second-largest pneumatic components maker in China, with more than 20% market share in 2022. We think the firm’s leadership position is underpinned by its reputable brand, record, comprehensive sales network, and strong operating efficiency.

AirTAC is the second-largest pneumatic components maker in China, with more than 20% market share in 2021. We think the firm’s leadership position is underpinned by its reputable brand, record, comprehensive sales network, and strong operating efficiency.

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.

AirTAC is the second-largest pneumatic components maker in China, with more than 20% market share in 2021. We think the firm’s leadership position is underpinned by its reputable brand, record, comprehensive sales network, and strong operating efficiency.

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.

Narrow-moat AirTAC’s first-half 2022 net profit of TWD 3.28 billion, up 1% year on year, is below our expectation and we think the firm’s share price may face pressure in the near term. We lower our fair value estimate to TWD 860 from TWD 910 after taking into account lower guidance from the management. We think the firm is currently fairly valued and near-term sentiment will largely hinge on the pace of demand recovery. Our valuation for AirTAC implies a 2022 P/E ratio of about 26 times, roughly in the middle of its five-year historical trading range of around 14 times to 40 times. Our Uncertainty Rating is increased to High from Medium to reflect the murkier demand outlook.

AirTAC is the second-largest pneumatic components maker in China, with more than 20% market share in 2021. We think the firm’s leadership position is underpinned by its reputable brand, record, comprehensive sales network, and strong operating efficiency.

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.

AirTAC is the second-largest pneumatic components maker in China, with more than 20% market share in 2021. We think the firm’s leadership position is underpinned by its reputable brand, record, comprehensive sales network, and strong operating efficiency.