Advantech’s Platformization Takes Time; Lifting FVE to TWD 357 on Better Midcycle Forecasts

We think Advantech’s dominant position in the IPC industry and reputation for providing reliable products and after-sales services give it a head start in offering next-generation industrial solutions, interconnected equipment and "Internet of Things" services. We believe Advantech’s two-pronged strategy of developing IoT platforms and investing in IoT service firms, reinforces its commitment to integrating hardware and services, which differentiates itself from peers. Advantech’s revenue CAGR until 2026 is projected at 13%, with 70% of the growth to come from Asia’s growing demand for robotics and industrial automation, 20% from potential new business in the U.S. and the remaining 10% from IoT offerings.