KUALA LUMPUR (Feb 25): CIMB IB Research has maintained its “Add” rating on Inari-Amertron Bhd at RM3.38 with a lower target price of RM3.85 (from RM4) and said that after Inari’s 2QFY6/16 results briefing, the research house had turned cautious on Inari’s near-term prospects due to sluggish demand outlook and seasonal inventory adjustment.
In a note Feb 24, the research house said Inari’s management guided for double-digit decline y-o-y in 3QFY16 radio frequency (RF) shipment volume due to seasonal demand weakness and delay in customer orders.
“We cut FY16-18 EPS by 2-7% for lower shipment and higher depreciation assumptions.
“Maintain Add, with a lower target price of RM3.85, still based on 14x CY17 P/E.
“Inari is our sector top pick due to its attractive valuation, better exposure to the smartphone market and strong management team,” it said.
At 9.22am, Inari fell 1.18% or 4 sen to RM3.34 with 119,000 shares done.