MORNING CALL:4/8/23

RHB Research expects Inari Amertron’s portfolio diversification to bear fruit

Transcript

00:00 We're taking a look at Inari Amatron this Friday morning.

00:05 RHB Research upgrading the stock to buy from neutral with a higher RM3.62 target price

00:11 from RM2.31 previously.

00:14 The counter ended trading yesterday at RM3.09.

00:17 So nine-month FY23 core earnings at RM255m missing estimates due to a more pronounced

00:24 slowdown in volume loading and margin.

00:27 The outlook for the smartphone market is challenging.

00:30 IDC recently lowered its 2023 worldwide shipments forecast to a 3.2% decline from 1.1% decline.

00:39 But things should be looking up for Inari in the coming fiscal years.

00:42 RHB raising its FY24-25 forecasts by 5.7% to 14% after factoring in the contribution

00:50 from its new product portfolio and its China JVs.

00:54 Let's look at the new products first.

00:56 These include new power modules on the system on module platform, sensors, memory and power LEDs.

01:02 Then in China, Inari's 54.5% owned Yiwu Semiconductor International Core Plant on

01:09 an 11.5-acre land is on track for completion by the first half of FY24.

01:15 Meanwhile, its 51% owned Inari MIT has started operations at Plant P21 with various new product

01:23 launches in custom machining.

01:26 Now what does the street say?

01:27 According to Bloomberg data, analysts are split, with 12 recommending buy and 8 saying hold.

01:34 Average target price RM2.90, which is some 6% lower than Inari's last close of RM3.09.

01:40 Thanks for watching.