Inari weakness likely to dissipate, trending higher backed by better results
Inari Amertron Bhd suffered some setbacks after posting weaker results for the financial year ended June 30, 2024 (FY2024). The outsourced semiconductor assembly and test (OSAT) service provider fell to their lowest in more than three months in August following the results announcement.
The company had been consistently profitable in the past 5 financial years with its net profit fluctuating between RM155.8mil and RM390.9mil.
Inari net profit for the fourth quarter ended June 30, 2024 (4QFY2024) fell 17.54% to RM54.68 million from RM66.31 million a year earlier amid unfavourable forex movements, higher operating costs and early staging of new products.
This was despite revenue rising 11.5% to RM333.11 million from RM298.75 million, driven by higher loading volumes in the radio frequency (RF) and optoelectronics segments.
The outsourced semiconductor assembly and test player declared a fourth interim single tier dividend of 1.4 sen per share, to be paid on Oct 10. This brings the full-year dividend to 7.7 sen per share, lower than the 8.2 sen per share paid for FY2023.
For FY2024, the group’s net profit decreased by 7.21% to RM300.19 million from RM323.54 million despite revenue rising 9.21% to RM1.48 billion from RM1.35 billion.
Despite the semiconductor company’s recent weak results, analysts still expect better days ahead. Analysts are betting on the company that forms part of the Apple Inc’s supply chain and its exposure to artificial intelligence (AI) as AI-capable iPhone will be another super cycle.
Inari remains one of analysts’ preferred picks in the Malaysian technology sector due to its attractive risk-reward potential, exposure to AI infrastructure spending growth, and strong earnings quality and track record.
The company is also well positioned to benefit from the growth of high bandwidth networking optoelectronic devices serving the AI data centre market.
Consensus is projecting the group to show stronger net profit of RM399.2 million for FY25 and
RM448.9 million for FY26, translating to prospective PERs of 27.4x and 24.4x, respectively
Its debt-free balance sheet is backed by cash holdings of RM2.26 billion or 59.7 sen per share
which accounts for one-fifth of the existing share price as of end-Jun 2024.
Interestingly, there could be potential acquisition from Inari given its consistently robust cash reserves.
A larger cash reserve typically indicates a higher likelihood of acquisitions in the near term, as the company may need to pay out a higher dividend otherwise.
Investors would want to ride on the current weakness to gain exposure to the potential surge in Inari share price supported by better earnings.
The company had been consistently profitable in the past 5 financial years with its net profit fluctuating between RM155.8mil and RM390.9mil.
Inari net profit for the fourth quarter ended June 30, 2024 (4QFY2024) fell 17.54% to RM54.68 million from RM66.31 million a year earlier amid unfavourable forex movements, higher operating costs and early staging of new products.
This was despite revenue rising 11.5% to RM333.11 million from RM298.75 million, driven by higher loading volumes in the radio frequency (RF) and optoelectronics segments.
The outsourced semiconductor assembly and test player declared a fourth interim single tier dividend of 1.4 sen per share, to be paid on Oct 10. This brings the full-year dividend to 7.7 sen per share, lower than the 8.2 sen per share paid for FY2023.
For FY2024, the group’s net profit decreased by 7.21% to RM300.19 million from RM323.54 million despite revenue rising 9.21% to RM1.48 billion from RM1.35 billion.
Despite the semiconductor company’s recent weak results, analysts still expect better days ahead. Analysts are betting on the company that forms part of the Apple Inc’s supply chain and its exposure to artificial intelligence (AI) as AI-capable iPhone will be another super cycle.
Inari remains one of analysts’ preferred picks in the Malaysian technology sector due to its attractive risk-reward potential, exposure to AI infrastructure spending growth, and strong earnings quality and track record.
The company is also well positioned to benefit from the growth of high bandwidth networking optoelectronic devices serving the AI data centre market.
Consensus is projecting the group to show stronger net profit of RM399.2 million for FY25 and
RM448.9 million for FY26, translating to prospective PERs of 27.4x and 24.4x, respectively
Its debt-free balance sheet is backed by cash holdings of RM2.26 billion or 59.7 sen per share
which accounts for one-fifth of the existing share price as of end-Jun 2024.
Interestingly, there could be potential acquisition from Inari given its consistently robust cash reserves.
A larger cash reserve typically indicates a higher likelihood of acquisitions in the near term, as the company may need to pay out a higher dividend otherwise.
Investors would want to ride on the current weakness to gain exposure to the potential surge in Inari share price supported by better earnings.
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PhilipTSL : hope it hold on at 2.7
Zaclim OP PhilipTSL : Chart wise still very bad. But yes RM2.70 is the next support. Hope can see a reversal in this area