• Scaling greater heights. Although 3QFY6/15 results (to be released tonight) will be impacted by start-up costs of its new plant (P13), festive season and slower LED business, HLIB institutional research remains positive on INARI as P13 is on track and expected to contribute strongly from 4QFY15 and beyond, with potential upward revisions to our FY16/17 forecasts and target price.
• Positives industry outlook. Gathered from our recent E&E Technology forum, the industry is expected to expand healthily in FY15 with growth rate ranging 3%-12%, s ignaling another record year in the making. According to IDC’s March 2015 report, smartphone shipment volume reached 1.30bn units in 2014, representing a remarkable 27.7% yoy growth. By 2019, this is forecasted to reach 1.96bn units, a 5-year CAGR of 8.5%. This bodes perfectly well for Inari who has direct exposure to the smartphone market.
• Poised to rewrite all time high after building a strong base near RM3.14 or 23.6% FR. After hitting all time high of RM3.52 on 14 Apr, share price retraced 10.8% to a low of RM3.14 before gradually trending upwards to end at RM3.31 yesterday. We see further upside amid the ladder bottom formation on 29 Apr, supported by bottoming up of grossly oversold hourly and daily oscillators (RSI, Slow Stochastics and MACD).
• Immediate upside targets are RM3.36 (11 May high) and RM3.43 (76.4% FR). A decisive breakout above RM3.43 will spur prices higher to retest RM3.52 and our long term target price of RM3.71 (150% FR).

Source: Hong Leong Investment Bank Research - 14 May 2015