Inari earnings momentum to grow as 5G adoption kicks in


KUALA LUMPUR: Inari Amertron Bhd's should see growing earnings momentum as the adoption of 5G starts picking up speed, says Affin Hwang Capital research.

For the first quarter of its 2020 financial year, Inari recorded a core profit of RM46mil, which was 11% lower year-on-year. It accounted for 19% of Affin Hwang's and consensus full-year estimates.

However, the research house said the earnings were within expectations as they should improve in 2HFY20 with increased sales of 5G-related filters.

Ebitda margin was relatively stable at 23.9%. Lower contribution from the higher-margin sensor business might have negated margins, which was likely made up by the 1.7% y-o-y depreciation of the ringgit versus the US dollar.

"We maintain our BUY rating with a higher target price of RM2.14 based on a higher target PE multiple of 24x or +1SD above its 5-year mean (previously 20x) on CY20E EPS as we take into account the improved investor sentiment and appetite for the sector," Affin Hwang said.
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!
   

Next In Business News

The rise of online financial fraud in Malaysia
Cybersecurity experts share their views
Letter to the editor
Dutch Lady losing dividend appeal
Currencies crack as dollar dominates
Stable currency is a must for the economy
Persistent overhang
Kechara Soup Kitchen set for expansion
Making peanut butter cool again
The winding road to a 15% global minimum tax

Others Also Read