Monday, May 21, 2018

FW: AmBank Research - Inari Amertron: Strong growth lies ahead BUY, 21 May 2018

 

 

STOCK FOCUS OF THE DAY

Inari Amertron: Strong growth lies ahead                                             BUY

 

We reiterate BUY on Inari Amertron (Inari) and raise our bonus-adjusted fair value from RM1.87/share to RM2.50/share. We are pegging our fair value to a higher CY19F FD PE of 20x, as its recent capacity expansions put it in a better position to win new jobs and pose greater upside risks to our earnings projection. In addition, we have revised upwards our FY18F-FY19F profit forecasts by 10% and FY20F’s by 33% to reflect higher expected orders of LED and laser components from a German customer.

 

We came away with a visit to Inari’s P21 plant learning that its recently available space is ripe for production ramp-up in 1HFY19 (3–6 months’ time). In particular, the new space will be utilised for the production of new laser and LED components. Applications of the laser devices are mostly in smartphones, while the LED components will likely be used for billboards and other public display panels.

 

The revenue potential of these new products is substantial. To give some context, the two segments, taken in isolation, could be more sizeable than the group’s radio frequency (RF) business if matured (but would likely take 2–3 years).

 

Others:

Malaysian Pacific Industries: Earnings to pick up in 4QFY18F          BUY

Tan Chong Motor: Ends streak of losses                                                HOLD

 

 

 

QUICK TAKE

Plantation Sector: News flow for week 14 – 18 May                         NEUTRAL

 

 

RETAIL RESEARCH

Stocks On Radar: Pentamaster, N2N Connect, Dagang NeXchange, IQ Group      

 

 

ECONOMIC HIGHLIGHT

Japan: Expect BoJ to remain muted on normalization

 

 

NEWS HIGHLIGHTS

NTPM: To spend RM50mil on ex¬pan¬sion

Kerjaya Prospek Group: Chairman to inject property arm in GSB?

KKB Engineering: O&G unit eyes three more fabrication contracts

Vizione Holdings: Eyes new govt’s affordable housing projects

 

 

 

 

DISCLAIMER:

The information and opinions in this report are 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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