CIMB IB Research raises target price for Inari to RM2.50

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KUALA LUMPUR (May 17): CIMB IB Research has maintained its “Add” rating on Inari Amertron Bhd at RM2.18 with a higher target price of RM2.50 (from RM2.20) and said Inari’s 9MFY6/17 core net profit beat expectations, at 77%/81% of house/consensus FY17F due to better-than-expected margins from higher utilisation and favourable forex.

In a note May 16, the research house said Inari’s core net profit in 9MFY17 rose 47% y-o-y due to favourable currency movements and shift in product mix towards higher-margin products.

The research house said Inari declared a third interim DPS of 2.2 sen, bringing the total DPS in 9MFY17 to 7.0 sen, ahead of house  full-year estimate of 6.0 sen.

“We raise FY17-19F EPS by 4-6% as we expect stronger earnings in 4QFY17, driven by RF capacity expansion and contribution from new divisions (IIS & IOT).

“Maintain Add with a higher target price of RM2.50, based on 17.6x CY18F P/E,” it said.