• Maintain BUY (TP: RM4.45). Inari Amertron Berhad’s (Inari) 1QFY25 performance was relatively muted with revenue of RM388mn (+1.1% YoY) compared to RM384mn in 1QFY24. However, PATAMI plunged 71.6% YoY, to RM24mn from RM85mn in 1QFY24, mainly due to unfavourable foreign exchange movements, which led to an unrealised forex loss of RM47.2mn. Excluding this one-off impact, core PATAMI fell 9% YoY to RM75mn, still falling short of both our and consensus’ full-year forecasts, making up only 15% and 19% respectively. The company declared an interim single tier dividend of 1sen per share (1QFY24: 2.2sen), translating to a 156% payout. We maintain our BUY call with an unchanged TP of RM4.45 for now, awaiting for more details from the results briefing. Our TP is based on a 34x PER (+1 SD above average of 3-year historical forward PER) implied to FY25F EPS of 13.1sen.

• Key Highlights. On a QoQ basis, revenue and core PATAMI showed an improvement, up by 16.5% and 27.4% respectively. This growth was attributed to higher loading volume in RF business segments during the current quarter, signalling a partial recovery in demand.

• Earnings Revision. We maintain our forecast at this juncture, pending results briefing.

• Outlook. We remain cautious on Inari’s outlook, given the persistent geopolitical uncertainties and escalated trade tensions, which could weigh on demand recovery for semiconductors.

Source: BIMB Securities Research - 28 Nov 2024