UOBKH Research said the group is gearing up for a new flagship programme.
PETALING JAYA: Revenue growth for Inari Amertron Bhd
is expected to resume in financial year 2025 (FY25) of about 6% year-on-year (y-o-y) after accounting for an uneventful FY24.
Growth will be predominantly driven by its flagship radio frequency (RF) segment, with the group gearing up for a new flagship programme, said UOB Kay Hian (UOBKH) Research.
The group will also benefit from the upcoming artificial intelligence (AI)-capable smartphones and the booming demand of high bandwidth optoelectronic devices in networks and data centres.
“With an ex-cash 2025 price earnings ratio of 23.6 times and with the onset of recovery from a cyclical bottom, the current valuation offers a risk-reward dynamic for an favourable entry point.
“We maintain a ‘buy’ with a target price of RM3.40 a share,” said the research firm.
Inari’s share price has dropped 12.5% year to-date.
According to UOBKH Research, the share price weakness reflects market concerns over a slowdown of smartphone demand and the potential impact of the disruptive Interim Final Rule on AI Diffusion.
However, it gathered that the volume loadings of its RF business remain healthy at an optimised utilisation rate.
This could be due to the higher content value growth driven by the launch of new generation smartphones, the research firm said.
In the near term, momentum may come from the anticipated launch of a new affordable model by its primary US customer, which is expected to sustain healthy volume loadings well into the second half of 2025.
Inari ended its losing streak after the fifth consecutive y-o-y sales contraction in the fourth quarter FY23, led by higher loading volumes in RF after a series of inventory adjustment.
If not for the unprecedented foreign exchange fluctuations which resulted in meaningful foreign exchange losses, UOBKH Research said the bottom line performance could have fared better.
