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原始內容
AirTAC
2Q26 beat on strong OPM, lifts 2026 sales growth/OPM guidance; reiterate Buy
Reiterate Rating: BUY | PO: 1,900 TWD | Price: 1,365 TWD
2Q26 earnings +63% YoY; record-high OPM
AirTAC released its 2Q26 results and held a results briefing on 28 July. Revenue (in RMB terms) was RMB2.6bn, up 25% YoY and 20% QoQ. GPM came in at 49.7%, up 3.7ppt YoY and 1.7ppt QoQ, ahead of our 48.5% estimate. Operating income (clean EBIT) was NTD4.3bn, up 56% YoY and 28% QoQ, 13% above our estimate. OPM was 35.1%, up 4.5ppt/1.9ppt YoY/QoQ and a historical high, above our 34.0% estimate, despite a c.1.8ppt drag from social security payments. Net income was NTD3.3bn, up 63% YoY and 24% QoQ, 12%/19% ahead of our estimate/Bloomberg consensus.
Targets >20% YoY sales growth in 2026
AirTAC raised its 2026 sales growth target to >20% YoY, from 15-20% YoY previously, on the back of single-digit YoY growth of China ' s pneumatic components market. It also expects 2026 OPM to improve to >34%, from 33% previously, driven by higher utilization, efficiency gains, and an improved product mix. The company's pneumatic component capacity utilization is currently c.100%, and management expects it to remain at that level in 3Q26. Revenue from linear guide was up 24% YoY in 1H26, with capacity utilization at c.40% YTD. Management expects capacity utilization to rise further to 50% by end-2026, which can support a 30% GPM. AirTAC also aims to launch more products for semis customers in 2026-27, with small-batch supply starting in 4Q26.
Lift PO to NTD1,900, reiterate Buy
Factoring in AirTAC's 2Q26 results and better sales and OPM outlook, we raise our 2026/27E earnings by 5%/4%. We lift our PO to NTD1,900 (from NTD1,800), with a target P/E of 30x (was 32x; see details inside). We also raise our DCF-based valuation on higher earnings and FCF estimates for 2026-35. We reiterate Buy, considering AirTAC's market-share gain in the FA sector and early stage growth of its linear guide business.
| Estimates (Dec) (NT$) | 2024A | 2025A | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|
| Net Income (Adjusted - mn) | 7,624 | 8,400 | 11,753 | 13,124 | 14,594 |
| EPS | 38.12 | 42.00 | 58.76 | 65.62 | 72.97 |
| EPS Change (YoY) | 9.4% | 10.2% | 39.9% | 11.7% | 11.2% |
| Consensus EPS (Visible Alpha) | 56.99 | 65.04 | 72.35 | ||
| Dividend / Share | 20.01 | 28.59 | 38.20 | 42.65 | 47.43 |
| Free Cash Flow / Share | 40.24 | 26.63 | 47.16 | 57.48 | 55.98 |
| Valuation (Dec) | |||||
| P/E | 35.81x | 32.50x | 23.23x | 20.80x | 18.71x |
| Dividend Yield | 1.47% | 2.09% | 2.80% | 3.12% | 3.47% |
| EV / EBITDA* | 23.11x | 20.81x | 15.74x | 14.17x | 12.81x |
| Free Cash Flow Yield* | 2.95% | 1.95% | 3.46% | 4.21% | 4.10% |
| * For full definitions of iQ method SM measures, see page 8. |
This research report provides general information only. No part of this report may be used or reproduced or quoted in any manner whatsoever in Taiwan by the press or other persons without the express written consent of BofA Securities.
>> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst under the FINRA rules.
Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions.
BofA Securities does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
Refer to important disclosures on page 10 to 13. Analyst Certification on page 6. Price
28 July 2026
Equity
| Key Changes (NT$) | Previous | Current |
|---|---|---|
| Price Obj. | 1,800 | 1,900 |
| 2026E EPS | 56.1 | 58.8 |
| 2027E EPS | 63.2 | 65.6 |
| 2028E EPS | 70.4 | 73.0 |
Ming Hsun Lee, CFA >> Research Analyst Merrill Lynch (Hong Kong) +852 3508 5006 minghsun.lee@bofa.com
Kenjin Hotta >> Research Analyst BofAS Japan
Yikai Liu, CFA >> Research Analyst Merrill Lynch (Hong Kong)
Summer Wang, CFA >> Research Analyst Merrill Lynch (Hong Kong)
Fiona Liang >> Research Analyst Merrill Lynch (Hong Kong)
Stock Data
| Price | 1,365 TWD |
|---|---|
| Price Objective | 1,900 TWD |
| Date Established | 28-Jul-2026 |
| Investment Opinion | C-1-7 |
| 52-Week Range | 741.00 TWD-1,600 |
| TWD | |
| Mrkt Val / Shares Out (mn) | 8,456 USD / 200.0 |
| Market Value (mn) | 273,000 TWD |
| Average Daily Value (mn) | 34.57 USD |
| Free Float | 68.8% |
| BofA Ticker / Exchange | ATCXF / TAI |
| Bloomberg / Reuters | 1590 TT / 1590.TW |
| ROE (2026E) | 21.5% |
| Net Dbt to Eqty (Dec-2025A) | -7.2% |
FA: factory automation
YTD: year-to-date
iQ profile SM AirTAC
| Key Income Statement Data (Dec) | 2024A | 2025A | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|
| (NT$ Millions) | |||||
| Sales | 30,660 | 34,330 | 43,489 | 48,731 | 53,997 |
| Gross Profit | 14,314 | 15,782 | 21,219 | 23,758 | 26,338 |
| Sell General &Admin Expense | (4,248) | (4,384) | (5,112) | (5,722) | (6,260) |
| Operating Profit | 9,026 | 10,288 | 14,792 | 16,575 | 18,473 |
| Net Interest &Other Income | 608 | 358 | 203 | 289 | 279 |
| Associates | 0 | 0 | 0 | 0 | 0 |
| Pretax Income | 9,634 | 10,645 | 14,995 | 16,864 | 18,752 |
| Tax (expense) / Benefit | (2,010) | (2,246) | (3,243) | (3,740) | (4,158) |
| Net Income (Adjusted) | 7,624 | 8,400 | 11,753 | 13,124 | 14,594 |
| Average Fully Diluted Shares Outstanding | 200 | 200 | 200 | 200 | 200 |
| Key Cash Flow Statement Data | |||||
| Net Income | 7,624 | 8,400 | 11,753 | 13,124 | 14,594 |
| Depreciation &Amortization | 2,561 | 2,578 | 2,218 | 2,323 | 2,427 |
| Change in Working Capital | (97) | (3,987) | (2,038) | (1,452) | (3,326) |
| Deferred Taxation Charge | 0 | 0 | 0 | 0 | 0 |
| Other Adjustments, Net | 591 | 675 | 0 | 0 | 0 |
| Cash Flow from Operations | 10,678 | 7,667 | 11,933 | 13,995 | 13,695 |
| Capital Expenditure | (2,630) | (2,340) | (2,500) | (2,500) | (2,500) |
| (Acquisition) / Disposal of Investments | 0 | 0 | 0 | 0 | 0 |
| Other Cash Inflow / (Outflow) | (1,067) | 1,371 | 0 | 0 | 0 |
| Cash Flow from Investing | (3,696) | (969) | (2,500) | (2,500) | (2,500) |
| Shares Issue / (Repurchase) | 0 | 0 | 0 | 0 | 0 |
| Cost of Dividends Paid | (3,595) | (4,002) | (7,639) | (8,531) | (9,486) |
| Cash Flow from Financing | (9,518) | (9,429) | (7,139) | (8,031) | (8,986) |
| Free Cash Flow | 8,049 | 5,327 | 9,433 | 11,495 | 11,195 |
| Net Debt | (1,115) | (3,760) | (5,554) | (8,518) | (10,227) |
| Change in Net Debt | (3,304) | (2,645) | (1,794) | (2,964) | (1,709) |
| Key Balance Sheet Data | |||||
| Property, Plant &Equipment | 28,987 | 28,753 | 29,072 | 29,287 | 29,396 |
| Other Non-Current Assets | 3,155 | 3,740 | 3,702 | 3,665 | 3,629 |
| Trade Receivables | 9,719 | 14,395 | 14,201 | 15,171 | 17,375 |
| Cash &Equivalents | 6,726 | 3,977 | 6,271 | 9,735 | 11,944 |
| Other Current Assets | 8,974 | 6,675 | 9,345 | 9,896 | 11,331 |
| Total Assets | 57,561 | 57,540 | 62,591 | 67,754 | 73,675 |
| Long-Term Debt | 0 | 0 | 300 | 600 | 900 |
| Other Non-Current Liabilities | 558 | 323 | 323 | 323 | 323 |
| Short-Term Debt | 5,611 | 217 | 417 | 617 | 817 |
| Other Current Liabilities | 3,492 | 4,413 | 4,850 | 4,920 | 5,233 |
| Total Liabilities | 9,662 | 4,953 | 5,890 | 6,460 | 7,273 |
| Total Equity | 47,899 | 52,587 | 56,701 | 61,294 | 66,402 |
| Total Equity &Liabilities | 57,561 | 57,540 | 62,591 | 67,754 | 73,675 |
| iQ method SM - Bus Performance* | |||||
| Return On Capital Employed | 13.4% | 15.3% | 21.1% | 21.6% | 22.1% |
| Return On Equity | 16.9% | 16.7% | 21.5% | 22.2% | 22.9% |
| Operating Margin | 29.4% | 30.0% | 34.0% | 34.0% | 34.2% |
| EBITDA Margin | 37.8% | 37.5% | 39.1% | 38.8% | 38.7% |
| iQ method SM - Quality of Earnings* | |||||
| Cash Realization Ratio | 1.4x | 0.9x | 1.0x | 1.1x | 0.9x |
| Asset Replacement Ratio | 1.0x | 0.9x | 1.1x | 1.1x | 1.0x |
| Tax Rate (Reported) | 20.9% | 21.1% | 21.6% | 22.2% | 22.2% |
| Net Debt-to-Equity Ratio | -2.3% | -7.2% | -9.8% | -13.9% | -15.4% |
| Interest Cover | NM | NM | NM | NM | NM |
Key Metrics
- For full definitions of iQ method SM measures, see page 8.
Company Sector
Mechanical Engineering
Company Description
Listed in 2010, AirTAC is a pneumatics equipment and components manufacturer in Taiwan. It is among the top 2 players in China and held 20%+ market share in 2025. The China market accounts for nearly 95% of its 2025 sales.
Investment Rationale
We have a Buy rating on AirTAC given 1) growth supported by market-share gain in pneumatics industry and 2) growth in early stages of linear guide business.
Stock Data
Price to Book Value
4.8x
By sector: battery led the growth; machine tool solid
By sector, AirTAC's battery business outperformed in 2Q26, with sales up 56% YoY. Sales of its machine tool/general machinery business grew 35%/28% YoY, while revenue from electronics/auto business also grew 20%/20% YoY. Looking into 2026, AirTAC expects its battery business to maintain double-digit YoY growth amid the battery capex upcycle. The company also anticipates its electronics business delivering >10% YoY growth in 2026, largely supported by iPhone's continued spec upgrades and solid demand from the AI supply chain. For the auto industry, AirTAC aims to continue achieving double-digit YoY sales growth in 2026, thanks to market-share gains amid improving brand reputation, especially for Chinese EV brands.
Exhibit 1: Revenue breakdown by industries
Sales to the battery sector grew 56% YoY in 2Q26
| Sales contribution | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 3Q24 | 4Q24 | 1Q25 | 2Q25 | 3Q25 | 4Q25 | 1Q26 | 2Q26 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Electronic | 21% | 22% | 21% | 24% | 28% | 30% | 28% | 27% | 28% | 29% | 26% | 26% | 26% | 27% |
| Battery | 18% | 14% | 12% | 11% | 9% | 7% | 8% | 11% | 13% | 14% | 14% | 15% | 20% | 18% |
| Automobile | 6% | 5% | 6% | 7% | 7% | 7% | 8% | 9% | 10% | 10% | 11% | 10% | 9% | 9% |
| Packaging | 7% | 7% | 8% | 9% | 8% | 9% | 9% | 9% | 8% | 8% | 9% | 9% | 7% | 7% |
| Machine tool | 5% | 4% | 5% | 5% | 6% | 7% | 7% | 7% | 7% | 7% | 7% | 7% | 7% | 7% |
| General machinery | 7% | 7% | 8% | 6% | 6% | 7% | 7% | 7% | 5% | 5% | 6% | 6% | 5% | 5% |
| Textile | 2% | 2% | 2% | 2% | 5% | 5% | 5% | 5% | 5% | 4% | 4% | 4% | 5% | 4% |
| Energy and lighting | 10% | 16% | 15% | 9% | 9% | 6% | 4% | 3% | 4% | 4% | 3% | 3% | 3% | 3% |
| YoY growth | ||||||||||||||
| Electronic | -5% | -10% | 14% | 30% | 37% | 33% | 22% | 11% | 8% | 6% | 10% | 17% | 20% | 20% |
| Battery | 16% | -5% | -8% | -30% | -50% | -46% | -40% | 5% | 65% | 117% | 100% | 57% | 85% | 56% |
| Automobile | 28% | 5% | 0% | 23% | 18% | 23% | 20% | 17% | 43% | 35% | 52% | 31% | 15% | 20% |
| Packaging | 10% | 24% | 26% | 31% | 12% | 13% | 4% | 3% | 10% | 1% | 10% | 16% | 10% | 17% |
| Machine tool | 6% | 4% | 23% | 18% | 12% | 46% | 28% | 22% | 16% | 2% | 17% | 17% | 20% | 35% |
| General machinery | 12% | 22% | 31% | 9% | 11% | 14% | 3% | 17% | 10% | 11% | 17% | 16% | 35% | 28% |
| Textile | -18% | -13% | -10% | 94% | 53% | 47% | 29% | 11% | -6% | -14% | 0% | 5% | 22% | 39% |
| Energy and lighting | 127% | 250% | 130% | 17% | -18% | -66% | -78% | -66% | -65% | -35% | -8% | 15% | -2% | -7% |
Source: Company report
Earnings review and revisions
Exhibit 2: 2Q26 results comparison
2Q26 earnings up 63% YoY, 12% above our estimates
| NT$mn | 2Q26 (A) | 2Q26 (F) | Diff (%) | YoY | QoQ | 1Q26 | 4Q25 | 3Q25 | 2Q25 | 1Q25 | 4Q24 | 3Q24 | 2Q24 | 1Q24 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (RMB mn) | 2,620 | 2,467 | 6.2% | 24.7% | 19.5% | 2,192 | 2,064 | 1,971 | 2,102 | 1,794 | 1,703 | 1,639 | 1,891 | 1,650 |
| Revenue (NTD mn) | 12,164 | 11,102 | 9.6% | 35.9% | 21.5% | 10,014 | 9,035 | 8,246 | 8,953 | 8,096 | 7,646 | 7,381 | 8,428 | 7,206 |
| COGS | -6,116 | -5,718 | 7.0% | 26.5% | 17.4% | -5,210 | -4,743 | -4,449 | -4,834 | -4,522 | -4,136 | -3,962 | -4,439 | -3,810 |
| Gross profit | 6,048 | 5,385 | 12.3% | 46.8% | 25.9% | 4,804 | 4,292 | 3,797 | 4,119 | 3,574 | 3,510 | 3,419 | 3,989 | 3,395 |
| Operating exp | -1,783 | -1,610 | 10.8% | 28.5% | 20.6% | -1,479 | -1,469 | -1,336 | -1,387 | -1,302 | -1,364 | -1,350 | -1,341 | -1,233 |
| Operating income | 4,265 | 3,775 | 13.0% | 56.1% | 28.3% | 3,325 | 2,823 | 2,460 | 2,732 | 2,272 | 2,146 | 2,069 | 2,648 | 2,162 |
| Pretax income | 4,238 | 3,845 | 10.2% | 64.9% | 23.8% | 3,424 | 2,957 | 2,652 | 2,570 | 2,466 | 2,256 | 2,179 | 2,871 | 2,327 |
| Net income before minority interest | 3,311 | 2,961 | 11.8% | 62.5% | 24.0% | 2,671 | 2,328 | 2,099 | 2,037 | 1,936 | 1,801 | 1,732 | 2,261 | 1,829 |
| Net Income | 3,311 | 2,961 | 11.8% | 62.5% | 24.0% | 2,671 | 2,328 | 2,099 | 2,037 | 1,936 | 1,801 | 1,732 | 2,261 | 1,829 |
| EPS | 16.55 | 14.80 | 11.8% | 62.5% | 24.0% | 13.35 | 11.64 | 10.50 | 10.19 | 9.68 | 9.01 | 8.66 | 11.31 | 9.15 |
| GM | 49.7% | 48.5% | 48.0% | 47.5% | 46.0% | 46.0% | 44.1% | 45.9% | 46.3% | 47.3% | 47.1% | |||
| OPM | 35.1% | 34.0% | 33.2% | 31.2% | 29.8% | 30.5% | 28.1% | 28.1% | 28.0% | 31.4% | 30.0% | |||
| NM | 27.2% | 26.7% | 26.7% | 25.8% | 25.5% | 22.8% | 23.9% | 23.6% | 23.5% | 26.8% | 25.4% | |||
| Opex to sales | 14.7% | 14.5% | 14.8% | 16.3% | 16.2% | 15.5% | 16.1% | 17.8% | 18.3% | 15.9% | 17.1% |
Source:
BofA Global Research estimates, company data
BofA GLOBAL RESEARCH
BofA GLOBAL RESEARCH
Exhibit 3: New vs. old estimates
We lift our 2026/27E earnings by 5%/4%
| (NT$ | 2026F | 2026F | 2026F | 2027F | 2027F | 2027F | 2028F | 2028F | 2028F |
|---|---|---|---|---|---|---|---|---|---|
| mn) | Old | New | dif. (%) | Old | New | dif. (%) | Old | New | dif. (%) |
| Consolidated sales (RMB mn) | 9,357 | 9,548 | 2.0% | 10,608 | 10,829 | 2.1% | 11,752 | 11,999 | 2.1% |
| Consolidated sales (NT$ mn) | 42,256 | 43,489 | 2.9% | 47,737 | 48,731 | 2.1% | 52,885 | 53,997 | 2.1% |
| Gross Profit | 20,336 | 21,219 | 4.3% | 22,999 | 23,758 | 3.3% | 25,519 | 26,338 | 3.2% |
| Operating Profit | 14,012 | 14,792 | 5.6% | 15,960 | 16,575 | 3.9% | 17,813 | 18,473 | 3.7% |
| Net Profit before minority shareholder | 11,211 | 11,752 | 4.8% | 12,648 | 13,124 | 3.8% | 14,083 | 14,594 | 3.6% |
| Net profit | 11,211 | 11,753 | 4.8% | 12,648 | 13,124 | 3.8% | 14,083 | 14,594 | 3.6% |
| EPS | 56.1 | 58.8 | 4.8% | 63.2 | 65.6 | 3.8% | 70.4 | 73.0 | 3.6% |
| Key ratios (%) | |||||||||
| Sales growth (RMB) | 18.0% | 20.4% | 13.4% | 13.4% | 10.8% | 10.8% | |||
| Sales growth (NT$) | 23.1% | 26.7% | 13.0% | 12.1% | 10.8% | 10.8% | |||
| EPS growth | 33.5% | 39.9% | 12.8% | 11.7% | 11.3% | 11.2% | |||
| Gross margin | 48.1% | 48.8% | 48.2% | 48.8% | 48.3% | 48.8% | |||
| Operating margin | 33.2% | 34.0% | 33.4% | 34.0% | 33.7% | 34.2% | |||
| Net margin | 26.5% | 27.0% | 26.5% | 26.9% | 26.6% | 27.0% | |||
| FX | |||||||||
| RMBTWD | 4.52 | 4.55 | 4.50 | 4.50 | 4.50 | 4.50 |
Source:
BofA Global Research estimates
Exhibit 5: P&L summary (quarterly)
We estimate net profit to grow by 40% YoY in 2026
| (NT$ mn) | 1Q25 | 2Q25 | 3Q25 | 4Q25 | FY '25 | 1Q26 | 2Q26 | 3Q26 | 4Q26 | FYE '26 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 8,096 | 8,953 | 8,246 | 9,035 | 34,330 | 10,014 | 12,164 | 10,520 | 10,790 | 43,489 |
| Cost of goods sold | 4,522 | 4,834 | 4,449 | 4,743 | 18,548 | 5,210 | 6,116 | 5,386 | 5,557 | 22,270 |
| Gross margin | 3,574 | 4,119 | 3,797 | 4,292 | 15,782 | 4,804 | 6,048 | 5,134 | 5,233 | 21,219 |
| Promotion | 730 | 832 | 750 | 854 | 3,166 | 846 | 1,062 | 894 | 939 | 3,741 |
| G&A | 302 | 291 | 313 | 311 | 1,217 | 322 | 367 | 347 | 335 | 1,371 |
| R&D | 270 | 264 | 274 | 303 | 1,111 | 311 | 354 | 326 | 324 | 1,315 |
| Operating expenses | 1,302 | 1,387 | 1,336 | 1,469 | 5,494 | 1,479 | 1,783 | 1,568 | 1,597 | 6,427 |
| Operating income | 2,272 | 2,732 | 2,460 | 2,823 | 10,288 | 3,325 | 4,265 | 3,566 | 3,636 | 14,792 |
| Pretax income | 2,466 | 2,570 | 2,652 | 2,957 | 10,645 | 3,424 | 4,238 | 3,637 | 3,696 | 14,995 |
| Taxes or tax credit | 530 | 533 | 553 | 629 | 2,246 | 753 | 927 | 749 | 813 | 3,243 |
| Profit before minority | 1,936 | 2,037 | 2,099 | 2,328 | 8,400 | 2,671 | 3,311 | 2,888 | 2,883 | 11,752 |
| Net income | 1,936 | 2,037 | 2,099 | 2,328 | 8,400 | 2,671 | 3,311 | 2,888 | 2,883 | 11,753 |
| Pretax EPS (NT$) | 12.3 | 12.9 | 13.3 | 14.8 | 53.2 | 17.1 | 21.2 | 18.2 | 18.5 | 75.0 |
| EPS (NT$) | 9.7 | 10.2 | 10.5 | 11.6 | 42.0 | 13.4 | 16.6 | 14.4 | 14.4 | 58.8 |
| Number of shares (mn) | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 | 200 |
| Operating Ratios | ||||||||||
| Gross margins | 44.1% | 46.0% | 46.0% | 47.5% | 46.0% | 48.0% | 49.7% | 48.8% | 48.5% | 48.8% |
| SG&A | 12.7% | 12.5% | 12.9% | 12.9% | 12.8% | 11.7% | 11.7% | 11.8% | 11.8% | 11.8% |
| R&D | 3.3% | 2.9% | 3.3% | 3.4% | 3.2% | 3.1% | 2.9% | 3.1% | 3.0% | 3.0% |
| Operating margin | 28.1% | 30.5% | 29.8% | 31.2% | 30.0% | 33.2% | 35.1% | 33.9% | 33.7% | 34.0% |
| Pre-tax margin | 30.5% | 28.7% | 32.2% | 32.7% | 31.0% | 34.2% | 34.8% | 34.6% | 34.3% | 34.5% |
| Tax rate | 21.5% | 20.7% | 20.8% | 21.3% | 21.1% | 22.0% | 21.9% | 20.6% | 22.0% | 21.6% |
| Net margin | 23.9% | 22.8% | 25.5% | 25.8% | 24.5% | 26.7% | 27.2% | 27.5% | 26.7% | 27.0% |
| YoY% | ||||||||||
| Revenue | 12.4% | 6.2% | 11.7% | 18.2% | 12.0% | 23.7% | 35.9% | 27.6% | 19.4% | 26.7% |
| Gross profit | 5.3% | 3.3% | 11.0% | 22.3% | 10.3% | 34.4% | 46.8% | 35.2% | 21.9% | 34.5% |
| Operating income | 5.1% | 3.2% | 18.9% | 31.6% | 14.0% | 46.3% | 56.1% | 45.0% | 28.8% | 43.8% |
| Net income | 5.8% | -9.9% | 21.2% | 29.2% | 10.2% | 38.0% | 62.5% | 37.6% | 23.8% | 39.9% |
| EPS | 5.8% | -9.9% | 21.2% | 29.2% | 10.2% | 38.0% | 62.5% | 37.6% | 23.8% | 39.9% |
| QoQ% | ||||||||||
| Revenue | 5.9% | 10.6% | -7.9% | 9.6% | 10.8% | 21.5% | -13.5% | 2.6% | ||
| Gross profit | 1.8% | 15.3% | -7.8% | 13.1% | 11.9% | 25.9% | -15.1% | 1.9% | ||
| Operating income | 5.9% | 20.2% | -9.9% | 14.8% | 17.8% | 28.3% | -16.4% | 2.0% | ||
| Net income | 7.5% | 5.2% | 3.1% | 10.9% | 14.7% | 24.0% | -12.8% | -0.2% | ||
| EPS | 7.5% | 5.2% | 3.1% | 10.9% | 14.7% | 24.0% | -12.8% | -0.2% |
Source:
BofA Global Research estimates, company report
BofA GLOBAL RESEARCH
BofA GLOBAL RESEARCH
Valuation
Our new PO of NT$1,900 (was NT$1,800) is based on the average of our DCF and P/E valuation methodologies.
(1) DCF-based fair value: We derive a fair value of NT$1,928 (was NT$1,806) from our DCF calculation, with assumptions of 3% free-cash flow (FCF) perpetuity growth (unchanged) and 10.3% weighted average cost of capital/WACC (unchanged). Our DCFbased fair value has increased, as we raise our 2026-35 earnings and free-cash flow estimates.
(2) P/E-based fair value: We apply a target P/E of 30x (was 32x) on its 2H26-1H27E EPS (rolled over from 2026E EPS), to derive our P/E-based fair value of NT$1,871 (was NT$1,794). Our 30x target P/E was around 1SD above its 5-year average (26x), reflecting our optimistic view on its near-term revenue and earnings growth amid the FA upcycle.
Exhibit 6: Valuation summary table
Our new PO is NT$1,900
| Valuation methodology | Implied value (NT$) | Upside/downside | Parameters |
|---|---|---|---|
| Methodology 1 | |||
| DCF | 1,928 | WACC: 10.3% | |
| Methodology 2 | |||
| P/E multiple | 1,871 | 30x | |
| Price Objective (rounded) | 1,900 | 39.2% |
Source: BofA Global Research estimates
BofA GLOBAL RESEARCH
Price objective basis & risk
AirTAC (ATCXF)
Our PO of NT$1,900, is based on the average of our DCF and P/E valuation methodologies.
- (1) DCF-based fair value: We derive a fair value of NT$1,928 from our DCF calculation, with assumptions of 3% FCF perpetuity growth and 10.3% WACC.
- (2) P/E-based fair value: We apply around 1SD above its 5-year historical average PER to arrive at our 2H26-1H27 target multiple (30x) and P/E-based fair value of NT$1,871.
Upside risks to our PO are (1) stronger-than-expected macro economy, (2) stronger rebound/recovery of capex cycle demand, (3) gross margin improvement on higher utilization, and (4) higher contribution from new products (linear guide).
Downside risks to our PO are (1) weak macro, (2) more domestic competition, (3) raw materials that account for 50% of COGS (e.g., aluminum and copper are 25-30% of COGS), (4) FX and, particularly, the yen, due to major competitor SMC, and (5) new electronic components business, which could be a drag on earnings if demand is weak.