INARI (0166) : AffinHwang Capital maintains Buy on Inari, ups target price to RM4.07
Affin Hwang maintains Buy on Inari
Monday, 19 January 2015
KUALA LUMPUR: Affin Hwang Research has maintained its Buy on Inari with a target price of RM4.07 based on an unchanged 16 times CY15 EPS.
"We like Inari given its position as a leading RF test house in the region.
"Backed by its strong technical expertise, cost efficiency, reliability and execution capability, Inari is likely to continue to benefit from greater outsourcing opportunities from Avago," it said in a note on Monday.
The research house said it raised its FY15-17 EPS forecasts by 2%-11% to account for the earlier-than-expected ramp-up in Inari’s P13 facility.
"Prior to this,however, management has squeezed a further 50 testers into its existing plants, raising its test equipment to 522 units currently.
"Our raised forecasts also take into account a new wafer processing service which has been recently agreed with Avago. P13 has a production floor space of 160k sf vs. Inari’s current space of 120k sf, which is nearly fully taken up. With the expansion in its radio frequency (RF) business, there is room for further margin upside," it said.
It said that Inari has guided that this wafer job could account for nearly 10% of its revenue and is likely to enhance margins as this project involves higher value add services.
Separately, an additional150 testers are expected to be consigned by Avago, bumping up its testing capacity and filling much of its new P13 production floor space.
http://www.thestar.com.my
Affin Hwang maintains Buy on Inari
Monday, 19 January 2015
KUALA LUMPUR: Affin Hwang Research has maintained its Buy on Inari with a target price of RM4.07 based on an unchanged 16 times CY15 EPS.
"We like Inari given its position as a leading RF test house in the region.
"Backed by its strong technical expertise, cost efficiency, reliability and execution capability, Inari is likely to continue to benefit from greater outsourcing opportunities from Avago," it said in a note on Monday.
The research house said it raised its FY15-17 EPS forecasts by 2%-11% to account for the earlier-than-expected ramp-up in Inari’s P13 facility.
"Prior to this,however, management has squeezed a further 50 testers into its existing plants, raising its test equipment to 522 units currently.
"Our raised forecasts also take into account a new wafer processing service which has been recently agreed with Avago. P13 has a production floor space of 160k sf vs. Inari’s current space of 120k sf, which is nearly fully taken up. With the expansion in its radio frequency (RF) business, there is room for further margin upside," it said.
It said that Inari has guided that this wafer job could account for nearly 10% of its revenue and is likely to enhance margins as this project involves higher value add services.
Separately, an additional150 testers are expected to be consigned by Avago, bumping up its testing capacity and filling much of its new P13 production floor space.
http://www.thestar.com.my
