STOCK FOCUS OF THE DAY
Inari Amertron: USD a transitory drag HOLD
We maintain HOLD on Inari Amertron (Inari) with a revised fair value of RM2.80/share (previously RM3.00/share), pegged to an unchanged FY19F PE of 18x. We have trimmed our FY18F-FY20F net profit forecasts by 7-8% mainly on account of a revision in our USD/MYR assumption from 4.12to 3.95. Currently, >90% of Inari's revenue is denominated in USD, whereas only ~50% of total costs is USD-based. Our sensitivity analysis shows that for every 1% depreciation in the USD/MYR, Inari's earnings would decline by 3%.
We expect the group to register sturdy YoY earnings growth in 2QFY18, fuelled by the full ramp-up of its RF chips in conjunction with several flagship smartphone launches. We also highlight that, currently, the monthly volume production of the group's iris-scanning components is nearly twice that of 1QFY18's. Nevertheless, the positives are dampened by both rising commodity prices and the weaker USD.
Others :
Unisem: Soft patch expecrted in 4QFY17 HOLD
QUICK TAKE
Bursa Malaysia: More measures to increase equity trading HOLD
STRATEGY
US: Volatility expected to be short-lived
ECONOMIC HIGHLIGHTS
The Philippines: Inflation pressure remains
Australia: RBA keeps policy rate on hold
NEWS HIGHLIGHTS
Bursa Malaysia: Wahid: Market growth to continue despite sell-off
Equity Markets: Markets tumble: Is it time to be fearful or greedy?
Hartalega: Plans to boost dividend payout
Gadang: To buy Johor land from Danny Tan’s private firm for RM149m
DISCLAIMER:
The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
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