Advantech’s 2030 Sales Target Bolsters Our Long-Term Confidence; Shares Cheap Amid Weak Bookings

We raise our fair value estimate on Advantech to TWD 416 per share from TWD 362, after reducing operating expenses forecasts up to 2027 as we foresee more streamlined operations following the company’s reorganization. Our fair value estimate corresponds to 27 times 2023 P/E. Advantech is undervalued, in our view, as recent lukewarm bookings lead to investors overlooking its 17% five-year EPS CAGR. We believe Advantech’s Internet of Things, or IoT, offerings can ride on China’s recovery later this year and the increase in interconnectivity in the retail, industrial and healthcare sectors.