Inari Amertron Bhd

The Edge FD Top Pick 2017

Inari Amertron Bhd is expected to return to double-digit growth as analysts are positive about the impact from the iPhone’s 10th anniversary that is expected to see something major planned by Apple Inc for the device.

Bloomberg data shows earnings per share for the financial year ending June 30, 2017 (FY17) is expected to grow by 23.4% year-on-year, while revenue will see an increase of 21.9%. The consensus 12-month target price for Inari is at RM3.73, indicating a potential upside of 12.3% from its last closing price on Dec 30, 2016 at RM3.32. Ten out of 12 research houses give a “buy” call on the semiconductor player.

Inari is the leading radio frequency (RF) test house with a solid working relationship with Broadcom, also a leader in the RF industry, which has a three-year supply agreement with Apple until 2018. Inari is expected to benefit from this.

Meanwhile, the risk and fear of how Trump’s protectionism policy might affect Inari have also been slightly overdone, according to Affin Hwang Asset Management head of equity strategies and advisory, Gan Eng Peng, as near-term changes are likely to be minimal.

The group’s FY16 saw a decline of 2.81% in its net profit to RM148.3 million from RM152.5 million in FY15 despite a revenue growth of 11.6% to RM1.04 billion during the same period. However, its latest financial results for the first quarter ended Sept 30, 2016 (1QFY17) saw its net profit return to growth, with an increase of 5.5% to RM48 million from RM45.5 million in 1QFY16. — By Billy Toh