KUALA LUMPUR: Inari Amertron Bhd’s shares fall in early trade Friday after announcing a private placement to raise up to RM1.065bil.
The semiconductor company fell one sen to RM3.25. Year-to-date, it has risen some 18.8%.
Inari announced that it wants to raise up to RM1.065bil via a private share placement to be used for capital expenditure, acquisitions and investments.
Based on the indicative price of RM3.20 each, the private placement exercise would raise as much as RM1.065bil.
This would increase Inari's issued share capital by 10%.
The fundraising, Inari said, would speed up its plans to acquire "good quality, strategic, attractive and complementary" chipmakers and outsourced semiconductor test and assembly (OSAT) companies.
"With the proceeds raised from the proposed private placement, the group intends to increase its production capacity in line with the growing demand for 5G mobile phones," it said.
PublicInvest Research is positive on this move, as the proceeds raised would put Inari in a better position to negotiate with potential clients.
It also allows the group to further expand and benefit from the current upcycle caused by global chip shortage.
“However, the exercise will have a dilutive effect on immediate year EPS forecast.
“On a fully-diluted basis (including ESOS options), the impact to EPS is expected to be about -11% while our target price would be lowered to RM3.88,” the research house said.
PublicInvest has maintained its “outperform” call on Inari with an unchanged target price of RM4.40, implying 45x PE on its CY21F EPS of 9.7sen.