Kenanga upgrades INARI (0166) INARI AMERTRON BHD amid super technology cycle
KUALA LUMPUR: Kenanga Research has upgraded its target price on Inari Amertron with the return of foreign investors to Malaysia, which it expects to put the company into the limelight given its large overseas following.
"Inari stands out, given its 16-18% foreign shareholdings and also having one of the best international visibility among the Malaysian
"More importantly, Inari is one of the cheapest in terms of forward PE whilst offering superior growth prospects among large technology peers locally," it said.
Kenanga added it is noteworthy that Inari has reached a new milestone by crossing the RM10bil mark cap last week, which reinforces its position as the Malaysian technology leader.
The research house noted that there is a semiconductor shortage, which is leading to OSATs expanding capacity.
Given Inari has recently completed its expansion in Batu Kawan, Inari is in a prime position to welcome multinational corporations as potential customers, said Kenanga.
There could also be blockbuster profits ahead following Inari expansion of Inari's raqio frequency system-in-a-package assembly capacity from eight lines to 22 in phases.
"By now, all new assembly lines are already in production mode, which means meaningful contribution should kick in from 3QFY21 onwards. As per our check last week, Inari is currently running at 90% utilisation, defying the typical seasonality, and signalling robust earnings," said Kenanga.
The research house maintained its earnings forecast and outperform call with a higher target priceo f RM4, up from RM3.14, based on rolled-forward FY22 forecast price-earnings of 40x, up from 35x.