KUALA LUMPUR: The prospects of Inari Amertron Bhd
remain dim, said Kenanga Research, as the semiconductor assembly firm guided for modest improvements in the upcoming quarter.
In a results update, Kenanga cited an IDC report that smartphone manufacturers globally have continued to exercise caution and adopted a prudent strategy instead of flooding the channel with excess stock in pursuit of short-term gains.
"Amidst the challenging macro environment, the group anticipates modest improvements in the upcoming quarter, supportedby the very gradual recovery of China's economy and its affinity for the US smartphone brand," it said.
Inari released the results of the third quarter of its financial year yesterday, which disappointed expectations.
According to Kenanga, 9MFY23 core net profit of RM255.5mil, which was 15.6% lower than in the previous year, accounted for only 67% and 66% of its and consensus full-year estimates.
Inari's topline contracted by double digits on weaker demand across all segments, with the RF segment exhibiting a larger decline amid a slowdown in global smartphone shipments.
Moving forward, Kenanga expects Inari's operating environment to remain challenging given its high dependence on consumer electronics.
"We cut our FY23-24F net profit forecasts by 11% each as we factor in an overall weaker RF loading volume due to further softening in the smartphone space.
"We reduce our TP by 5% to RM2.46 (previously RM2.60)ona rolled forward earnings base of FY24F, pegged to an unchanged PER of 23x (which is in line with peers’ forward mean)," it said, while reiterating its "market perform" recommendation.
