Win Semi Earnings: Growth in Autos and Smartphones Eclipsed by Liquidity and Competition Concerns

We retain our fair value estimate for Win Semiconductors of TWD 245 as we believe a milder increase in the second half of 2024 will follow the upbeat first-quarter performance. Win Semi is undervalued, in our view, as the market remains unconvinced of a smartphone recovery and is focusing on competitor expansion in the near term rather than structural growth in optical components demand. Win Semi’s mediocre balance sheet may be improved disproportionately amid China’s smartphone recovery, triggering a rerating in the stock.