Wednesday, July 25, 2018

FW: AmBank Research - Inari Amertron: To see higher revenue from RF BUY, 25 July 2018

 

 

STOCK FOCUS OF THE DAY

Inari Amertron: To see higher revenue from RF                                                 BUY

 

We maintain our BUY recommendation on Inari Amertron (Inari) with a higher fair value of RM2.61/share (vs. RM2.50 previously). Our valuation is pegged to a CY19F PE of 20x, in line with its 3-year average. We have revised our FY19F and FY20F earnings marginally upwards by 4.1% and 4.2% respectively after factoring in a slightly higher utilisation rate for its radio frequency (RF) segment. We believe that the segment will continue to grow sturdily on the back of rising RF content in smartphones, which is needed to facilitate the transition from 4G LTE to 5G.    

 

Aside from that, Inari is working with its German customer to develop several new products – (1) fine-pitch LED (<2mm pixel pitch) used for billboards and other public display panels; and (2) health sensor as well as vertical-cavity surface-emitting laser (VCSEL) components for both 2D and 3D sensing applications.

 

We believe meaningful earnings contributions from the new products will start showing in 6–9 months’ time. For now, raw materials are being consigned to Inari for processing. After 3–6 months of observational period, if volume picks up, Inari would start purchasing raw materials for its customer. This allows the group to book higher revenue due to a higher bill of materials (BOM). The new products, if fully ramped up, can potentially generate more revenue than its bread-and-butter RF business.

 

Others:

WCT Holdings: In better position to enforce Meyden arbitration award  HOLD

 

 

RETAIL RESEARCH

Stocks On Radar: D&O Green Technologies, Kerjaya Prospek, UEM Edgenta, LBS Bina    

 

ECONOMIC HIGHLIGHT

Malaysia: FDI down 12.7% y/y in 2017

 

NEWS HIGHLIGHTS

Property Sector: Get ready for property bubble burst — IDEAS

Radiant Globatech: Ends first trading day 130% above offer price

DNeX: Launches GoHalal platform in the Philippines

I-Bhd: Net profit up 5.6% in Q2

 

 

 

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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