INARI (0166) : 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 thepotential 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.
http://www.thestar.com.my
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 thepotential 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.
http://www.thestar.com.my
