Win Semi Hammered by Weak Smartphones; Shares Attractively Priced at No-Growth Levels

We lower our fair value estimate on Win Semiconductors to TWD 258 after factoring in even weaker smartphone-related sales and a small market share loss following new capacity from a competitor. Our fair value estimate corresponds to 49 times 2023 adjusted P/E before normalizing in 2024 to 30 times. The stock looks appealing to us, as the current price seems to assume a no-growth scenario beyond 2025 even the company is steadfast in building the Kaohsiung cluster to address incremental non-smartphone demand. Valuation is at a five-year low in terms of price-to-book at 1.5 times. We see a reversal of smartphone sentiment in the first half of 2023 to be a catalyst for Win Semi.