Inari Amertron

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In July, Inari Amertron Bhd proposes to raise up to RM133.2mil via a renounceable rights issue of up to 88.82 million new shares for its expansion and working capital.

The company recently secured the conditional approval for the listing and quotation for up to 88.82 million warrants to be issued under the rights issue and also the listing of up to 88.82 million rights shares.

Affin Hwang Research had recently stated Inari is the most profitable in ringgit terms among the semiconductor companies under its coverage.

It added the drivers of growth would be the expansion plan of newly acquired manufacturing plant, and future expansion plan in the Batu Kawan land.

Source: The Star

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Affin Research maintains Buy on Inari Amertron
Wednesday, 10 September 2014

KUALA LUMPUR: Affin Investment Research is maintaining its Buy call on Inari Amertron with a target price of RM4.28, which is 36.3% above its last traded price of RM3.14.

It said on Wednesday Inari’s share price has outperformed the FBM KLCI by 95% YTD which is due to its exposure into the still-robust smartphone and tablet segments.

The positive share-price performance was also supported by its impressive earnings delivery.

“Inari is the most profitable in ringgit terms among the semiconductor companies under our coverage,” it said.

Affin Research said after the 4QFY14 results, it hosted Inari’s results briefing, attended by around 30 analysts and fund managers.

“Key takeaways from the briefing are:
1) product roadmap to drive earnings growth; and
2) expansion plan of newly acquired manufacturing plant, and future expansion plan in the Batu Kawan land.

Inari remains one of our top picks in Malaysia,” it said.

Source: The Star

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Inari gears up for strong growth
6 September 2014

http://www.thestar.com.my/Business/Busi ... ?style=biz

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Affin Research maintains Buy on Inari
18 August 2014

KUALA LUMPUR: Affin Research has maintained its Buy call on Inari with a target price of RM4.26 based on an unchanged target multiple of 18 times CY15 earnings per share.

In a note on Monday, the research house said it remains positive on Inari’s prospects given the company’s exciting growth prospects and its ability to leverage on its key customers’ which are market leaders in their respective field of operations.

“:Inari will report its 4QFY14 results on August 26. We believethe group’s 4QFY14 top and bottomline would be higher on a sequential and on-year basis.

“Implied in our FY14 net profit forecast is a 4QFY14 net profit of RM34.9mil vs core net profit of RM26.7mil in 3QFY14,” it said.

It added that the group is on track to deliver another set of record earnings in FY14 - core net profit of RM100.8mil, up 119% on-year.

“This is largely underpinned by the consolidation of Amertron accounts in FY14 and its ability to leverage on its Avago strength in the RF space.

“In addition, management guided that Amertron margins has improved to 6-8% vs 4% in mid-2013.

“All in, we believe Inari’s FY14E results will fall within our expectation. Inari will also be the largest company in term of profitability among semiconductor companies under our coverage,” it said.

Source: The Star

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Inari to raise RM133mil via 1-for-8 rights issue
5 July 2014

PETALING JAYA: Inari Amertron Bhd proposes to raise up to RM133.2mil via a renounceable rights issue of up to 88.8 million new shares for its expansion and working capital.

The company said in a statement yesterday that it intended to set aside RM40mil for the expansion of production capacity, including the purchase of land and factories, as well as to expand its existing factories.

It said a further RM40mil would be allocated for the purchase of new equipment and machinery and RM30.5mil for working capital.

“The remaining proceeds of RM22.7mil will be used for defraying bank borrowings and expenses of the rights and free warrants issue,” it said.

Inari said the 1-for-8 rights issue, at an indicative subscription price of RM1.50 per share, came with one free detachable warrant per rights share at an indicative exercise price of RM2 per warrant.

“The indicative rights issue price represents a 48.5% discount to the theoretical ex rights price of RM2.91, while the indicative warrant exercise price represents a 35.3% discount; both calculated based on the five-day weighted average price of Inari shares up to July 3 of RM3.09 per share,” the company said.

Source: The Star

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RHB Research maintains Buy on Inari Amertron
Wednesday, 21 May 2014

KUALA LUMPUR: RHB Research has maintained its Buy call on Inari Amertron with a target price of RM3.55 based on an unchanged price/earnings target of 15 times on fully diluted CY15 earnings per share.

In a note on Wednesday, RHB said Inari Amertron announced that the Securities Commission (SC) had approved its Proposed Transfer Listing.

“In conjunction with the Proposed Transfer Listing, SC also informed that the application for the lifting of the existing moratorium on Inari shares held by Insas Technology Berhad, Macronion Sdn Bhd and Ho Phon Guan has been approved.

“The lifting of the existing moratorium is to be effective on the date of the official listing of Inari on the Main Market of Bursa Malaysia,” it said.

Upon SC approval, the next procedure would be an approval from Bursa for an official date for an actual transfer of listing.

Thereafter, a general meeting will also be convened among Inari shareholders to obtain its approval before the transfer listing to the Main Market of Bursa Securities.

“Despite multiple rounds of delay, we are nevertheless positive with this announcement.

“With the Proposed Transfer Listing approved, we believe this would further provide greater recognition and confidence to its customers, suppliers, business partners, bankers and shareholders,” it said.

In addition, this would also provide better acceptance amongst investors, in particular, institutional investors thereby enhancing its investability, the research house said.

Source: The Star

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Robust outlook for Inari
Tuesday, 20 May 2014

INARI AMERTRON BHD

By Hong Leong Investment Bank
Neutral
Target price: RM3.09

Hong Leong Investment Bank (HLIB) said it left the analyst briefing with great optimism as the company’s existing radio frequency (RF) business remains robust underpinned by global proliferation of smart devices.

Meanwhile, its fibre optics division, namely ISK, is poised for maiden contribution in the fourth quarter of 2014, solidifying top line growth going forward.

The new RF plant (plant 5) is running at near full capacity or utilisation rate of 85% although it was expanded in Oct 2013.

It is now evaluating several alternatives for the next phase of expansion, including using plant 5’s rooftop, acquiring new land beyond Penang Island in Batu Kawan or procuring a ready factory.

The company’s optoelectronics business is experiencing strong demand from existing customers while profit margins improved from 4% to 7% thanks to enhanced production efficiency due to successful integration and optimisation.

Electric test and measurement equipment commenced delivery of five new products to Agilent since January 2014.

There are over 15 new products in the pipeline at final development stage to be introduced progressively to Agilent.

The company’s continuous investment in research and development has positioned Inari Amertron as the leader in system in package, a hybrid technology consisting of flip-chip packaging, surface mount technology and copper pillar bump with reducing thickness from 0.4mm to 0.3mm mold.

Source: The Star

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RHB Research maintains Buy on Inari

KUALA LUMPUR: RHB Research has maintained its Buy call on Inari Amerton, with a target price of RM3.82 pegged on a 17.5 times CY15F price per earnings, a 41.5% upside.

In a note on Thursday, the research house said Inari has finalised rights issue pricing at RM1.50 per rights share.

"The free warrants attached to the rights share are priced at RM2.00 exercise price. We believe the proceeds raised from the rights issue could help to expand its core businesses to propel earnings growth in the medium term," it said.

It added that the exercise would cater for future growth opportunities within its radio frequency integrated circuits segment, as we have highlighted previously that existing capacity is almost fully occupied at an average utilisation rate of over 85%.

"This would entice investors to subscribe for the rights as the warrants will be issued deep in the money. Based on our calculations, Inari’s share price ex-rights and ex-warrants (given that it is deep in the money) would be adjusted to RM2.51 (from its last closing of RM2.70)," it said.

The research house urged investors to subscribe for the cash call as it believed the exercise could help to fund its expansion plans and hence propel earnings growthover the medium term.

"Upon completion of the rights issue and assuming full conversion of the new warrants, Inari’s fully-enlarged share base would increase to 797.7 million,while we would tweak our target price accordingly to RM3.10," it said.

Source: The Star

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Electronic component manufacturer Inari Amertron Bhd is on track to achieve its RM1 billion revenue target by the financial year ending June 30, 2016 (FY16), Chief Executive Officer Lau Kean Cheong said after the group’s extraordinary general meeting today.

The group’s FY14 revenue has rose to RM793.66 million from RM241.14 a year earlier, lifting its net profit to RM101.27 million from RM42.01 million.

Lau said revenue growth would be underpinned by booming demand for radio frequency (RF) and opto electronic products, as the growth rate of the former has outperformed the semiconductor sector as a whole.

According to Lau, the growth is mainly driven by rising demand for smartphones and tablets.

Therefore, he said Inari will focus in producing electronic components to cater to the booming industries.

On top of that, Lau also foresee that Inari’s fibre optic division will emerge as a new income driver in FY16 or FY17.

Inari share price went up five sen or 1.67% to RM3.04 today, with 7.59 million shares traded, giving it a market capitalisation of RM1.86 billion.

Source: The Edge

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Affin Hwang Research maintains Buy on Inari

KUALA LUMPUR: Affin Hwang Research has maintained its Buy call on Inari with a target price of RM3.80 based on its strong growth prospects as the company is highly leveraged to Avago’s strong wireless segment.

The stock offers a three-year net profit CAGR of 26% against its FD CY15E price per earnings of 12.8 times, it said in a note on Thursday.

"We expect Inari’s earnings delivery to remain one of the most solid among its semiconductor peers. This is partially attributed to its strong wireless division growth which is underpinned by its key customer Avago.

"Inari’s expansion is timely, and coincides with the expansion of Avago’s own facility. As a key contractor for Avago’s wireless division, we think that Inari stands to be a major beneficiary," it said.

This could potentially also lead to earnings surprise once the new plant is commissioned.

"Therefore, we are not concerned about the potential dilutive impact from its proposed 1:8 rights issue. Trading at 12.8 times FD CY15E EPS, Inari remains our top sector pick given its strong growth prospects," it added.

Coinciding with Avago’s own expansion in its wireless division, Affin Hwang thinks that Inari, being its largest contractor, will likely be a major beneficiary.

"With rapid expansion in Inari’s RF business, we think that there is also possibility of earnings surprise heading into 2HFY15.

"Taking this into account, we are not overly concerned about any dilutive impact from Inari’s ongoing 1:8 rights issue. Implied in our FY15 net profit is a quarterly net profit forecast of RM34mil per quarter, which appears modest against the backdrop of the upcoming capacity," it said.

Source: The Star