Inari Amertron Berhad - Results Largely Within Expectations

Date: 
2024-02-27
Firm: 
TA
Stock: 
Price Target: 
3.55
Price Call: 
BUY
Last Price: 
3.05
Upside/Downside: 
+0.50 (16.39%)

Review

  • INARI’s 1HFY24 core profit of RM179.5mn came in within expectations, accounting for 52.0% and 48.8% of ours and consensus full-year estimates.
  • A second interim dividend of 2.2sen/share was declared, bringing YTD dividend to 4.4sen/share. (1HFY23: 4.8sen/share)
  • YoY, 1HFY24 core profit dropped 11.7% to RM179.5mn, despite revenue was 2.4% higher at RM798.0mn. The weaker bottom line was mainly due to higher electricity rates and losses in work-in-progress items arising from glitches in electricity supply. Meanwhile, the group also suffered from lower gross margin (-7pp YoY) at 23.8%, due to new products launching.
  • QoQ, 2QFY24 core profit increased 9.5% to RM93.8mn on higher revenue. The group saw its revenue jump 7.9% to RMRM414.1mn due to higher loading volume in radio frequency and optoelectronics segments.
  • Meanwhile, INARI maintained a robust balance sheet with a net cash position of RM1,830.0mn as at end-2QFY24.

Impact

  • Maintain FY24 to FY26 earnings forecasts.

Outlook

  • Going forward, we expect INARI to see sequential earnings improvement, alongside an anticipated recovery in the global demand for semiconductor.

Valuation & Recommendation

  • Target price is maintained at RM3.55, based on unchanged 33xCY24 earnings. Reiterate Buy on INARI.

Source: TA Research - 27 Feb 2024

Discussions
Be the first to like this. Showing 0 of 0 comments

Post a Comment