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INARI

Author: YiStock   |   Latest post: Thu, 6 Dec 2018, 11:36 AM

 

INARI - Largan Precision Latest Result Suggesting Iphone Is Doing Fine - YiStock

Author: YiStock   |  Publish date: Thu, 6 Dec 2018, 11:36 AM


 

I have been waiting for Apple's main vendor to release their earning to further judge if Iphone is GREAT or BREAK.

Finally, the Largan Precision has released it November 2018 Revenue.

 

 

As usual, the killing type news title. Else who will want to read news. Right?

Let dig deeper. 

AS USUAL, THIS IS MY OWN BOLD GUESSTIMATE and PLEASE READ FOR FUN ONLY!!!

 

LARGAN PRECISION

- COMPANY BACKGROUND

Founded in 1987 by Scott Lin, Largan Precision is the world's leading manufacturer of smartphone camera lenses, supplying components to Apple and major Chinese cellphone makers. The company was listed on the Taiwan Stock Exchange in 2002. 

Let look at numbers.

Above table show largan precision's Revenue Cycle. The company will go through 6 months of high volume loading from July to December. Year in Year out the cycle remain the same.

The 6 months high volume loading period gave away total Revenue as per below:

2H FY 2016 -  NT$ 30,036,957 or Average NT$ 5,006,159 per month

2H FY 2017 - NT$ 31,006,512 or Average NT$ 5,167,752 per month

Now, Let See below for FY 2018.

 

Key Interpretation:

(1) It seems like the frontloading has actually occured in May 2018 instead of Jun 2018. 

(2) Let use May 18 to Oct 18 as 6 month high loading guide (instead of Jun to Dec), total Revenue stood at NT$30,391,091 or AVERAGE NT$ 5,065,182. Compared to FY 2017, the number has reduced by 1.98%. Compared to FY 2016, the number has increased by 1.2%

(3) Let use May 18 to Nov 18 as 7 month high loading guide, total Revenue stood at 34,399,091 or AVERAGE NT$ 4,914,155. Compared to FY 2017, the number has reduced by 4.9%. Compared to FY 2016, the number has reduced by 1.8%.

 

My Thoughts:

(1) By now everyone should know that Apple has excess inventory (high loading) in FY 2017. Therefore, i suppose FY 2018 revenue decrease of 1.98% (6 months) is really not alarming.

(2) Not to forget that Apple has further cut Largan Precision volume and allocated more volume of REAR camera for GeniuS Electronic Optical Co., Ltd. 

(3) Genius Electronic traditionally supply part of the facecamera (front camera) for Iphone. For FY 2018, the company managed to get order for the Rear facing camera and hence Largan Precision volume is cut. With that, I doubt the 1.98% (6 months average) or 4.9% (7 months average) is significant.

 

(4) Since Iphone 7 launched in 2016, Apple has already use 12 MP (12 x million) rear facing camera. The 12 MP camera has goes into Iphone7, 7 plus, 8, 8 plus, iphone X, XS, Xs Max & Xr.

Based on the information provided by largan precision, the revenue of camera above 10 MP has grown to 60% to 70% compared to October of 50% to 60%. When 10 MP phones has increased 10%, this means that those lower than 10 MP actually suffered contraction (small branded / no branded smart phones?)

The slight drop of revenue is HIGHLY UNLIKELY  DUE TO APPLE because since iphone 7, apple has already use 12 MP camera.

 

 

Conclusion:

(1) Althought Largan Precision has given away some market share to Genius Electronic Optical, the revenue does not seem to impact much. Iphone XS and Iphone Xs Max seems doing very well.

(2) Broadcom share some similarity to Largan Precision where it losses the Iphone Xr market share (2x 2 MIMO phone, slower speed) to Qorvo. Market has reacted to poor iphone Xr sales on Inari. But i suppose poor iphone Xr sales reflected high acceptance of iphone Xs / Xs max, which is actually good news to Inari. Market is hard to please.

(3) Inari recent guidance has highligted RF segment will continue to grow at normal pace due to higher RF content in new launched iphone. 

(4) The above result by largan precision has somehow shows that many china branded phones (below 10 MP) are actually not doing well. Does this indicate that people actually buy more high end phones?

 

Cheers,

YiStock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Labels: INARI
  3 people like this.
 
YiStock https://www.reuters.com/article/us-broadcom-results/broadcom-earnings-beat-on-strong-demand-for-data-center-products-idUSKBN1O52I0
07/12/2018 8:03 AM
YiStock We benefited from upside volumes of legacy phone generations at our North American OEM customer,” Tan said.
07/12/2018 8:04 AM
probability https://asia.nikkei.com/Opinion/China-and-US-should-defuse-Huawei-affair

The U.S. fears Chinese companies like Huawei and ZTE are instruments of Chinese influence, if not spying. Such suspicions are legitimate. Huawei, which now rivals Apple as a leading telecoms provider, has invested heavily in 5G and seeks to be a world leader. Washington has lobbied its allies, particularly its "Five Eyes" intelligence-sharing partners (U.K., Canada, Australia, New Zealand). All except Canada have rejected Huawei 5G technology, and there is pressure on Ottawa to join them. Japan, which plans a 5G rollout for the 2020 Olympics is also leaning in that direction. Though Portugal has signed up with Huawei for 5G, Germany and other European nations are becoming skeptical.
07/12/2018 6:43 PM

INARI - My Thoughts (5) - YiStock

Author: YiStock   |  Publish date: Tue, 27 Nov 2018, 12:06 PM


 

image:https://www.youtube.com/watch?v=vXBxUKZJfIs

Iphone "XI" ? (iphone 11)

Expecting an "iphone super cycle" in china? :-))

 

I have written about inari yesterday. https://klse.i3investor.com/blogs/Inari/183804.jsp

Today this kopi-o research i added in latest data. 

Key Observation:

(1) Noticing the average quarter revenue for singapore segment from FY 14 to FY 18: 

RM 157.9 mil --> Rm 199.9 mil -->  Rm 209.9 mil --> Rm 218 mil --> RM 253.4 mil --> RM 256 mil (1 quarter). 

FY 2017 showed high base of growth due to iphone X and causeing excess inventory. 

(2) Based on latest singapore segment revenue, i believe the supply chain excess inventory has returned to normal. This echo with the Apple's inventory and confirmed my previous thought is correct.

(3) Demand for RF has again returned to normal growth. I'm putting revenue to averagely grow in the 5% pace. The explosive growth should only be in 2019 when 5 G kicks in. Worth to note that with higher RF content, the revenue will not jump as significant as the profit, this is a volume game.

(4) Samsung Q3 shipment is the real culprit for inari Q1 FY 2019. It has falled by 13.4% and has resulted in lower volume loading for Iris scanner volume in Inari. Moving forward, Osram will lift this segment. 

(5) Also interesting is the supply chain effect. If you notice FY 16 Q1 & Q2 high base revenue (probably causing excess inventory too in the supply chain) has resulted significant drop in FY 16 Q3 & Q4. The effect has prolonged into FY 17 Q1 & Q2. But leading to higher volume in FY Q3 & Q4 which traditionally should be low season.

All in all, i think inari is doing fine, just supply chain effect. 

 

My Thoughts on Inari RF Business: Bullish!!!

THE Apple Ecosystem

You may have/ or have not heard about the term: Apple "Iphone Ecosystem". The ecosystem is basically a huge user base that apple has created over the past 10 years. To understand it, just imagine Apple is Airasia (of course, should be Tony wanted to be like Tim Cook), you have millions and millions of loyal customers to continue use your product, use your UPGRADED product, to experience all the excitement etc. 

Let see Iphone models launched over the past 10 years:

If you noticed that iphone 5S launched in 2013 is still supported by Apple. More than 5 years. That raises 1 important question: Can competitors offer such durable phones? 

While some media has demonised its longer-phone upgrade-cycle and used it to attack apple, I view it quite positively whereby the huge user carrying old iphone served as "RESERVE BANK" for future iphone models, while Apple continue to build / acquired new user. The phone upgrading cycle is self sustaining. Refer this link:  https://www.statista.com/statistics/606147/iphone-model-device-market-share-worldwide/

 

 

 

As of Oct 2018,

(1) iphone 6S plus and older model around 27.66% (Dec 2017: 54.3%)

(2) Iphone 7/ 7 plus around 33% ( Dec 2017: 32.7%)

(3) Iphone 8/ 8 plus around 22% ( Dec 2017: 7.4%)

(4) iphone X around 14% (Dec 2017: 5.3%)

(5) Iphone Xs/ Xs max around 3.4% 

From above statistic, about 50% of the Iphone 6S plus or older model user has upgraded thier phone.

To be more specific, iphone 6/ 6 Plus/ 6S / 6S Plus users was 41.6% in Dec 2017 and the active user has upgraded thier phones and make the number of 6/ 6 Plus/ 6S / 6S Plus users reduced to 19.1%.

While we see a big jump in iphone 8/ 8plus / iphone X.

To answer the the long pending doubt of iphone getting expensive ? above data show price tag is not really a problem within iphone ecosystem.

 

https://www.businessinsider.my/warren-buffett-apple-iphone-enormously-underpriced-2018-8/?r=US&IR=T

You probably hear people call themself "苹果粉丝“/ "I 疯" . They just love iphone.

So far we did not see "Iphone Super Cycle" as we see in 2014/2015 when big screen iphone 6S/ 6S plus launched. But a gradual progressive one. A good one.

We certainly going to see one when 5G launched. IoT is future. Nobody will be left behind. Part of the reason of super cycle in 2014/2015 could also be due to the use of 4G. 

 

How many Apple product is active in use now?

1.3 BILLION Devices including mac, ipad, iwatch etc

[iphone - 1 Billion https://www.cultofmac.com/465968/iphones-user-base-to-surpass-1-million-units-by-2019/) ]

 

https://www.apple.com/newsroom/2018/02/apple-reports-first-quarter-results/

Don't forget, ALL DEVICES need more RF filters when signal moving in higher frequency. 

Moving towards, more 4G, 4GLTE devices will be sold and eventually 5G will kicks in, the requirement for RF content will be in great to greater level.

Inari increases it RF testers capacity for another 25% for good reason.

https://www.mwrf.com/systems/top-5-rf-technologies-5g-iot

Conclusion:

(1) Iphone expensive? Price is never a problem to iphone itself, you are the problem indeed!

(2) tradewar fear? yes, this is one significant risk. But beyond my control. I have wrote my logic here. https://klse.i3investor.com/blogs/YiStock/164917.jsp

 

Cheers!

YiStock

 

 

 

 

Labels: INARI
  2 people like this.
 
unclejoe YiSTock, good job! Samsung and all China Tier 1 Handphone makers are gearing up for their 5G flagship handphone release by either Q1 or Q2 2019.
27/11/2018 4:36 PM
pputeh Thanks YiStock for a detailed write up
27/11/2018 8:27 PM
iamwen Went to AGM today. From what the director said. The RF tester increase around 100++ units from 2017 to 2018 from 700+ unit to near 900 unit this year.
Each tester cost from 1-1.6 million usd. Broadcom is increasing the tester to prepare for future expansion. I think this align with your thought. And hope mi and penta will benefit from such trend which is align of what you write about penta. And also Inari is switching IR scanner to VCSEL to support osram for the company that acquired by osram recently.
27/11/2018 11:08 PM
iamwen And Inari is well diversified to health sensor such as biometric sensor, heart beat sensor at smart watch which is one type of opto electronic as well. Not to forget about mini led. However, this two sector won’t contribute significantly.
27/11/2018 11:14 PM
unclejoe iamwen, thanks a lot! How about the current capacity utilisation rate for both assembly and test?
28/11/2018 6:30 AM
YiStock iamwen, thanks for the great input
28/11/2018 8:16 AM
7210 YiStock, do you think it is still worth to invest in INARI?

INARI had issued bonus shares in 2016, 2017, and april 2018, this had diluted the EPS, ad resulted in high PE.
28/11/2018 3:44 PM
YiStock Inari should have 1 more round of bonus issue 1:2 by end of the year due to the removal of Par value regime change. You can search back 2016 report for the detail.

The share price is adjusted post bonus issue. PE should stay the same.
28/11/2018 4:23 PM
7210 Yistock, many countries now block huawei 5G including NZ. what is your thought?

https://klse.i3investor.com/blogs/kianweiaritcles/184256.jsp
28/11/2018 4:59 PM
YiStock i think they are talking about communication system, not huawei smartphone.
28/11/2018 5:05 PM
unclejoe Inari Q report Briefing, by CIMB and Omighty Capital:

the key highlights

Positive earnings growth for FY 2019
Osram products to contribute 30% in FY 2018 increased to 50% in FY 2020
Flat utilisation for 1Q 2019 and same expectation for 2Q 2019
New products include mini LED, facial recognition chip and health sensor
New products to contribute in 2H 2019
28/11/2018 5:16 PM
YiStock Found the reasoning finally. Also witnessed again how the short seller operate and newsmedia manupulate human's fear and greed

The Evil:
https://www.wsj.com/articles/not-so-big-in-japan-apple-cuts-price-of-i...

The Clue:
https://asia.nikkei.com/Business/Companies/Apple-to-alter-iPhone-sales...
https://www.cultofmac.com/561675/apple-japan-antitrust-rules-iphone/
https://www.japantimes.co.jp/news/2018/07/11/business/corporate-busine...

My thought:
It is a long practice for apple subsidizing japan carrier to capture the biggest market share there.
29/11/2018 08:33
29/11/2018 8:35 AM
YiStock And let listen to what the insider tell:
https://www.macrumors.com/2018/11/28/iphone-xr-best-selling-iphone/
29/11/2018 8:39 AM
YiStock "蘋果產品行銷部副總裁Greg Joswiak在最新專訪中堅稱,iXR上市後就是最暢銷機種。
路透社、CNET報導,蘋果產品行銷部副總裁Greg Joswiak 28日在接受訪問時表示,iPhone XR目前是蘋果「最主流的商品、也是最受歡迎的iPhone」(most mainstream product and our most popular iPhone)。他說,自從iXR上市之後,就一直是最暢銷的iPhone機種。
這跟市場先前傳出的消息不太相符。

https://www.moneydj.com/KMDJ/News/NewsViewer.aspx?a=2834584b-914c-4c14-8586-d92949585f25&c=MB010000
29/11/2018 10:51 AM
unclejoe A lot of fake news in WSJ on Apple Iphone lately. I had terminated the subscription. It is waste of money, I rather spend that on BBC or The Economist.
29/11/2018 10:52 AM
iamwen @unclejoe based on my memory, utilization rate at malaysia factory is around 70% and philippines is 60%, China factory is around 70% if i didn't remember wrongly
29/11/2018 12:04 PM
unclejoe iamwen, Thanks a lot! 70% utilisation rate is good for the enlarge capacity. This is inline with UOB's OCT report (see below:The loading volume for Inari’s RF segment is good in October, with utilisation rate of the testing capacity at 65-70% and the assembly capacity at >90%). Current quarter loading is higher than Q1'19.
29/11/2018 12:26 PM
iamwen http://www.inariberhad.com/img/ir/8th%20AGM%20minutes%20(Key%20Matters%20Discussed).pdf
27/12/2018 3:49 PM
iamwen Inari now upload the matter discussed in AGM to their website, and i think it is very good for investor which not able to attend the AGM
27/12/2018 3:49 PM

INARI - Things Still Look Great to Me (4) - YiStock

Author: YiStock   |  Publish date: Mon, 26 Nov 2018, 3:32 PM


 

My first article about Inari was written in Oct 2015 https://klse.i3investor.com/blogs/Inari/71543.jsp

The market cap of Inari was RM 2.2 bil. 

Today 26 Nov 2018, @ RM 1.70 per share (RM 5.38B) , Inari is not spared and having corrected all the way from RM 2.50 per share (RM 7.9B market cap).

This nearly 31% drop in the market cap was due to various "bad news / speculation" about Apple Iphone. 

As of today, nobody can judge whether those supply chain bad news/ speculation is true / false. It will never anyway, because Apple has decided not to reveal the key statistic about the unit sale of thier product.

Such move by Apple has offered tremendous opportunity for anyone who wish to be in the media headlines by creating all the negative news.

After all, it can no longer be verified, Remember?

I offered my 1st doubt when bad news about Lumentum come out. Yes, bad "NEWS"

https://klse.i3investor.com/blogs/YiStock/182096.jsp

Then, somebody has highligted more explaination for all these malignant or wicked speculation.  https://appleinsider.com/articles/18/11/19/poor-news-curation-at-bloomberg-cnbc-reuters-creating-misleading-iphone-supply-chain-panic

Whatever it is, it is really up to the wisdom of individual investor to make their decision.

I have been holding Inari for so long, let me attached some key numbers and will probably explain more when Q result out.

 

To my opinion, everything looks great so far. 

(1) Except lot of bad "NEWS" which offer no direct evident so far pointing Inari is slowing down.

(2) 2018 Q1 & Q2 of high base iphone X production may have been balanced by low revenue in 2018 Q3 & Q4.

(3) The Core Earning which offset Forex may offer clue Inari will be doing just fine.

(4) The new launches of Iphone XS/ Max, together with higher demand of iphone X, iphone 7, iphone 8. All  needed higher RF content to run at 4G LTE.

Will Inari Slow down? 

http://www.theedgemarkets.com/article/inaris-new-plants-seen-boost-earnings

I'm still positive

 

Cheers!

YiStock

Labels: INARI
  4 people like this.
 
YiStock Posted by unclejoe > Nov 25, 2018 03:02 PM | Report Abuse

郭台铭否认富士康将裁员10万人 . http://www.enanyang.my/news/20181125/%E9%83%AD%E5%8F%B0%E9%93%AD%E5%90...



Posted by unclejoe > Nov 25, 2018 03:04 PM | Report Abuse

Billionaire Terry Gou says outlook for iPhone assembler Foxconn is strong at least until January.
https://www.scmp.com/tech/article/2174
26/11/2018 3:40 PM
Invest_Sensibly Mr. YiStock, can you comment on Tguan? May I know where to search for resin chart?
26/11/2018 3:59 PM
TheSyndicate Judging from the growth of the company's profit for the past few quarters (dwindling), I would not recommend a buy. The growth has been slowed down and the latest quarter has registered the lowest earning in about 6 years. I would wait for the coming QR to make a decision.
26/11/2018 4:52 PM
YiStock TheSyndicate, a brilliant choice. Q2 2019 result to be released in Feb 2019 will know if all negative news are truth/false
26/11/2018 6:56 PM
probability YiStock, whats your opinion on Inari's results today?
26/11/2018 10:37 PM
YiStock Probability, i think the latest result proven that Q1 & Q2 2018 base had both overshot from normal. That was when apple launched iphone x using single premium model with target of 80 mil unit production. The inventory carriying value has shot up in apple and revenue & profit of inari has also shot up. Iphone X content value is much higher compare previous model, resulted in US$1000 price tag.

With latest result in, the RF segment has back to it normal growth track. I compute the singapore revenue with 5% growth from 2016 (not 2017 due to high base). I think is very reasonable. Latest result has met my RF projection for Q1 2019. So, i think the profit is warranted for RF segment up to now.

As for all the negative news circulating in supply chain, those are pointed to Q2&Q3 of 2019.

Inari latest quarter affected by samsung indeed. But with next year new samsung model introducing 2D face ID as additional feature on top of iris scan, inari vcsel (i need to confirm this) and IR should prosper again.

New factory space for OSRAM has startef production in Q1 2019, i hope to see better contribution in february result.

5G is on the way, i will continue to hold my holding.
27/11/2018 7:56 AM
YiStock Another point is that Revenue can no longer use to judge Inari RF segment simply because the higher RF content will increase Profit more significantly than Revenue itself. Inari RF capacity has increased another 25% based on analyst report.
27/11/2018 8:36 AM
pputeh YiStock . I have the same reasoning. Will hold on to my Inari stock
27/11/2018 9:18 AM
probability YiStock,Thank you
27/11/2018 9:32 AM
YiStock https://klse.i3investor.com/blogs/Inari/183906.jsp
27/11/2018 12:07 PM
calvintaneng Inari is good

Well diversified and good
27/11/2018 4:39 PM

INARI - Switching to Fast Gear (3) - YiStock

Author: YiStock   |  Publish date: Fri, 23 Oct 2015, 9:53 AM


 

Inari Ametron, I must say: you never let me down! 

Ever since i participated KCChong's value investing course, i gain a lot of insight about value investing. without KC, i believe i will not have such a wonderful gain in share market, i'm grateful. A big THANK YOU to KCCHONG!

I have wrote 2 articles about Inari in February & May 2015

http://klse.i3investor.com/blogs/Inari/71543.jsp

http://klse.i3investor.com/blogs/Inari/76590.jsp

I have achieved the gain i am looking from Inari. But that is not the end yet. Inari is still on massive expansion stage. I have decided to sold all my mother share and switch all proceeds to Inari-WB. 

My rational is very simple,

1) THe Inari-WB is current IN-THE-MONEY and the expiry date is way long to go.

2) Judging the growth path of Inari, i very "daringly" assume the son should always move together with mother. I decided to use the son's price to calculate the Margin of Safety. 

3) I have put RM 4.30 as next TP (post expansion) for Inari, minus RM 2.00 execise price, the son is possibly traded at RM 2.30 a warrant. How i wish! 

Margin of Safety (MOS)
  Current share Price 1.74    
  RR\GR 5% 10% 15% 20%
>50% UV 5% 17.32% 36.55% 51.54% 63.10%
50%-0% 7% 8.38% 29.18% 45.54% 58.28%
>-10% Fair 12% -15.92% 8.82% 28.71% 44.52%
>-50% OV 15% -31.85% -8.40% 17.29% 35.04%
           

Many would have disagree with me, for sure. But i must sing the song "MY WAY" by frank sinatra.

Cheers'

YiStock

23 Oct 2015

 

Disclaimer: This is just for reading pleasure only!

  Be the first to like this.
 
bsngpg Hi Yi: You did great calculation and are maximizing leverage effect on WB. On the contrary, I took a bit more conservative approach than you where I converted the only two free WB to mother share as I think the 40% DPO would suppress the “up” of the mother share. Furthermore I am cheap in enjoying the tiny dividend. Ha ! Ha! Good luck and looking forward to your venture to win big.
23/10/2015 10:51 AM
Value Investor Coo1eo Inari has enjoyed tremendous growth together with the upcycle of Semicon industry last 2 years....however, 2016 and 2017 is expected to be slow...look at Gartner estimates. So just be cautious.
23/10/2015 11:22 AM
Ezra YiStock, I've recently conducted some study into Inari.
One of my findings is that global smartphone sales growth has dropped significant recently. http://www.gartner.com/newsroom/id/3115517
Hence it may be better to stay more conservative.

On one note, Inari EV/EBit is now 17 if i'm not mistaken, which I'm not keen of.
The valuation seemed too high for me. What do you think about it?

It's not a disagreement with you about Inari, it's just a discussion.
And oh yeah, forget about the other comment of mine. I've done a wrong calculations and deleted it.
23/10/2015 4:20 PM
YiStock bsngpg Hi Yi: You did great calculation and are maximizing leverage effect on WB. On the contrary, I took a bit more conservative approach than you where I converted the only two free WB to mother share as I think the 40% DPO would suppress the “up” of the mother share. Furthermore I am cheap in enjoying the tiny dividend. Ha ! Ha! Good luck and looking forward to your venture to win big.
23/10/2015 10:51

Hi Bsngpg, i think dividend is definitely important. KC thought us well, your total return = capital appreciation + dividend. I let go the dividend as i perceive the quantum of appreciation of Inari-wb is worth more than the dividend yield. I assume dividend play is more on stagnant growth companies like those blue chips. For inari, the growth is still substantial.

I hope i m not wrong on this :-)

No right or wrong, just different investor's appetite. Cheers!
24/10/2015 8:27 AM
YiStock Amit Khindriya
Inari has enjoyed tremendous growth together with the upcycle of Semicon industry last 2 years....however, 2016 and 2017 is expected to be slow...look at Gartner estimates. So just be cautious.
23/10/2015 11:22

Ezra_Investor
YiStock, I've recently conducted some study into Inari.
One of my findings is that global smartphone sales growth has dropped significant recently. http://www.gartner.com/newsroom/id/3115517
Hence it may be better to stay more conservative.

On one note, Inari EV/EBit is now 17 if i'm not mistaken, which I'm not keen of.
The valuation seemed too high for me. What do you think about it?

It's not a disagreement with you about Inari, it's just a discussion.
And oh yeah, forget about the other comment of mine. I've done a wrong calculations and deleted it.


Hi Amit & Ezra,

I think as an investor, we must be able to digest the information presented to you especially information from media.

You see, human psychology is somehow designed to be "pessimistic". A same scenario, when presented in negative/ pessimistic way, it tends to receive great attention.

From the link you provide, "Gartner Says Worldwide Smartphone Sales Recorded Slowest Growth Rate Since 2013";

i would read it as:

(1) " Wooa...when the whole world seem troubled by many issues, smartphone sales still recorded growth!!! thank god

(2) "Growth Rate" VS "Negative rate". See the different?

About the EV/EBIT at 17, i will usually add on ROIC.

ROIC+ EBIT/EV must be at the minimim of 20%. Anything above 30% i will consider to buy too if other quantitative criteria such as PEG or margin of safety and etc are fufilled. Also to look at qualitative aspect of business.

If you look at light asset companies like Scicom & MYEG, the EV/EBIT will definetely very high.. but because their ROIC is extremely high, people still willing to look at them.

This is my thoughts. Cheers!
24/10/2015 8:45 AM
Ezra Dear YiStock, thank you for your reply, and thanks for sharing your insight and reasoning. Below is my constructive comment from some studies of Inari. I hope you will it accept with an open heart. If you feel offensive, please ignore this comment.

YiStock: "ROIC+ EBIT/EV must be at the minimim of 20%. Anything above 30% i will consider to buy too if other quantitative criteria such as PEG or margin of safety and etc are fufilled. Also to look at qualitative aspect of business. "

"Wooa...when the whole world seem troubled by many issues, smartphone sales still recorded growth!!! thank god "
-----------------------------------------------
"Price is what you pay. Value is what you get." - Warren Buffett

First, Buying into a high growth high valuation company always seemed exciting. However, we must first always ask ourselves this question - how sustainable is the growth?
To further understand this, please have a look at this.

https://en.wikipedia.org/wiki/File:The_Forces_of_the_Business_Cycle,_1922.jpg

So this raises the million question, yes smartphone sales still recorded growth, but how sustainable is the growth? If the growth is no longer as sustainable, is the company still deserve such high valuation? I'm not able to answer that as I'm no expert in the semi-con industry. I'll leave it to you guys tech experts.

This is one of the reason Warren Buffett never buys into many tech companies such as Microsoft, Netflix and Alibaba.
24/10/2015 11:02 AM
YiStock Ezra, no worry about any comment. If you agree with me, market statistic is one aspect, company performance is another aspect. We see boom n doom and many different sector, but companies still perform differently. When CPO price / COP retreated 50%, there are companies that still doing very well. Opposite is also true. Our job is to keep looking at the performance of companies, the rest leave it to the luck. Cheers
24/10/2015 11:03 AM
Ezra YiStock: "If you look at light asset companies like Scicom & MYEG, the EV/EBIT will definetely very high.. but because their ROIC is extremely high, people still willing to look at them. "
---------------------------------------------------------------
"A Good Company Is Not Necessarily a Good Investment"

Second, is Inari still a good investment? When I first learned of Inari, it was trading around 2.20 (damn, I seriously should have brought it last time, what was I thinking?). But it is 3.70 now. So, is it still a good buy?

Not necessary.

According to gurufocus.com,
- The Graham Number for Inari, is RM 1.74 only.
- Margin of Safety (Earnings Based) using Discounted Earnings model for Inari Amertron Bhd is -25.42%.
- EV/EBIT ratio for today is 17.06

So is it still a good buy? Inari is no doubt is a good company, but at current price, is it still a good investment? Hmm... I'm more skeptical to invest in it.

About Scicom and Myeg, we must always compare apple with apple, and orange with orange. No doubt they are same in the technology market, but their field is vastly different. One is Semicon, the other one is more leaned towards Trading/Services. It's like for example, a PC repairman VS a coder.

One thing about Scicom, if you looked properly, it's cash is depleting, FCF is also decreasing, but that's another story we'll not look into it here.
24/10/2015 11:14 AM
Ezra And yes, I agree that, market statistic is one aspect, company performance is another aspect. For example, even at such a low oil prices, there are still few O&G related companies that actually performs quite good. But how much will Inari affected by the slow growth of smartphone sales... Err... well like you say, the rest leave it to the luck, hahaha.
After all, an investment relies on 70% fundamental, 30% luck.

Anyways, I always appreciate your articles YiStock - Frontkn, Inari, Canone, they're always good. Please keep up with the writings. Cheers.
24/10/2015 11:24 AM
YiStock Be brave! Maximize the gain via Inari -WB. It is deep in-the-money. Thank you.
17/11/2015 2:34 PM

INARI - Continue to Create Value (2)- YiStock

Author: YiStock   |  Publish date: Fri, 15 May 2015, 10:11 AM


I 'm impressed, after reading the latest Q report annouced yesterday. Let check again what are the changes after 3 Q FY 15.

PARAMETERS 06/30/11 06/30/12      06/30/13      06/30/14      03/31/15 (3Q)
Net Cash from Operating Activity 19,057,330 18,216,958 70,598,000 40,550,000 110,561,000

 

Inari has never let me down, so far. My TP 2 - RM 3.82 remained unchanged!

Inari, GREAT JOB!

Cheers!

YiStock

15.05.2015

  Be the first to like this.
 
truthseeker1 No wonder Thong keep disposing. He knew result not good.
15/05/2015 10:17 AM
speakup insider trading!!!! report! report!!!!
15/05/2015 10:26 AM
apini thanks yistock,

i will include this as my long term holding
15/05/2015 11:33 AM

INARI - A Heart-Wrenchingly Stock to Many (1) - YiStock

Author: YiStock   |  Publish date: Sat, 28 Feb 2015, 5:26 PM


I 'm impressed, after reading the latest Q report annouced yesterday. Let check again what are the changes after 3 Q FY 15.

PARAMETERS 06/30/11 06/30/12      06/30/13      06/30/14      03/31/15 (3Q)
Net Cash from Operating Activity 19,057,330 18,216,958 70,598,000 40,550,000 110,561,000

 

Inari has never let me down, so far. My TP 2 - RM 3.82 remained unchanged!

Inari, GREAT JOB!

Cheers!

YiStock

15.05.2015

 

 

"Hearth-Wrenching- Having a painful emotional impact; causing grief or distress" - Wiktionery

 

Inari Amertron - A typical “小兵变大将“ successful business story that causing hearth-wrench to many investors, those do not believe, partially believe and even those that fully believe, be it individual, and perhaps institutional investors. Those missed the opportunity, those continue to miss the opportunities'; those consistently bought -sold-bought-and sold-again; to even those that hold (value investors), will grudge at different intensity, because of not taking the advantage of the up-down of the price. They feel blessed, at the same time, cursed...that's why it is hearth-wrenching (揪心)

In merely 4 years, the business has grown from RM 63.5 million market cap. in year 2011, to current RM 2.2 billion. A 35 times (3500%) increased in market cap. Share price from RM 0.50, goes all the way to RM 3.40 per share. 

To Value Investors, share "price" will eventually reflect the "value" of the company, so long as enough time is given. But how much time is enough? The answer is "forever", as long as the company continue to create value for investors. 

Let look at Inari's financial statement. Pay attention not only to the income statement, every detail in the balance sheet should be looked into carefully.

 
*TTM's data are estimation. My personal estimation of EPS for complete FY 15 - FY 16 is RM 0.20 - RM0.24 per share (RM 1B revenue @ average 14% or highest 17% historical net margin)
 
Basic Analysis                            FY 2011  FY2012 FY2013 FY2014

FY2015*

Dupont's ROE

41.35% 23.25% 26.22% 37.52%

36.81%

Return of Asset

18.40% 12.98% 11.07% 19.51% 22.26%

Return of Invested Capital

51.46% 36.37% 22.25% 34.0% 41.37%
Current Ratio 1.1 1.55 1.62 2.07

2.44

Debt To Equity Ratio

1.25

0.79 1.37 0.92 0.65
Asset Turn Over 1.17 1.44 0.93 1.82

1.60

Receiveable Turn (days) 69 47 91 54

56

Dividend Payout Ratio 16.06% 46.2% 40.2% 32.4% 34.57%
Earning Yield (%)- ex-rights listed 21.15% 14.26% 10.15% 7.05%

5.90%

Valuation (Post Rights Share Listed)

1) PE Ratio (inlcude rights share) against TTM's EPS at RM 0.1820 per share

> against PE 18 (average of Gtronic, SkpRes, Unisem, JCY,MPI, VS), Share price is POSSIBLY traded at RM 3.27 (RM 0.182 EPS x 18 times) - Immediate  1st TP
 
> against PE 21 (compare with Gtronic with Fundamental score at 3.00; Inari at 2.7), share price is Possibibly traded at  RM 3.82 (RM0.1820 EPS x 21 times) - 2nd TP
 
-----------------------------------------------------------------------------------------------------------------------------------------------------
 
2) PE Ratio (include rights share) against RM 0.20 - RM 0.24 EPS (My personal target of EPS for complete FY 15 - FY 16 based on RM 1B revenue @ average 14% or highest 17% historical net margin)
 
> against PE 18 (average of Gtronic, SkpRes, Unisem, JCY,MPI, VS), Share price is POSSIBLY traded at RM 3.60 (RM 0.20 EPS x 18 times) to RM 4.30 (RM 0.24 EPS x 18 times)
 
> against PE 21 (compare with Gtronic with Fundamental score at 3.00; Inari at 2.7), share price is Possibibly traded at  RM 4.20 (RM0.20 EPS x 21 times) to RM 5.04 (RM 0.24 EPS x 21 times)
 
Of course, only GOD knows the future, human don't. Our duty is to keep an eye on company's fundamental, from time to time.
 
 
Happy investing!
 
P/S: Current Market Cap:
 
Inari - RM 2.2 B
JCY - RM 1.5 B
Unisem - RM 1.42 B
Gtronic - RM 1.36 B
MPI - RM 1.24 B
VS - RM 0.9 B
 
小兵终于变大将!
 
 
 
 
 
 
 
 
 
 
 
                                     
 
Labels: INARI
  2 people like this.
 
Icon8888 Mr Yi very productive nowadays : )
28/02/2015 5:45 PM
bsngpg Mr Yistock: thks for the write-up on inari. As I have 1 WB only, thus I sold out on the 1st day of trading. Unfortunately it shot up for free hundred ringgit on the next day. Miss 1 free China phone.

Do you study Vitrox as well ?
28/02/2015 7:38 PM
YiStock bsngpg, my very personal opinion as i didn't study vitrox. But one glance on their financial report for the past 5 years is good. income statement, balance sheet and cash flow.

I refer to The Edge financial dashboard, vitrox has fundamental score of 3.00, which is better than Inari at 2.7. However, the valuation of its may be less attractive at their category. Comparable one is elsoft which have 3.00 score at fundamental. Both vitrox and elsoft have valuation of 1.5. i.e. compare inari & Gtronic at 2.1, i opted more for inari. Hopeful for future smart device development for Inari too.

Vitrox PE is now at about 20 times..higher than inari as well.

Perhaps Vitrox need to be more generous with their Dividend too. A bit stingy.

Just my very basic comparison.
01/03/2015 4:02 PM
bsngpg YiStock: thks.
01/03/2015 5:35 PM


 

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