KUALA LUMPUR (Nov 16): Hong Leong IB Research has maintained its “Buy” rating on Inari Amertron Bhd with a higher target price of RM4.41 (from RM3.79) and said the company’s briefing was concluded satisfactorily with positive key inputs focusing on strategic business expansion plans.

In a note today, the research house said proposed bonus issue up to 206.1 million new shares on the basis of 1 for every 4 existing Inari shares.

HLIB Research said Inari was expected to begin to see gradual increase in wafer shipment in 2QFY16 and expect full loading in 2H16 as Avago completes foundry capacity expansion.

“Equipped with 609 RF testers as of Oct 2015 and this is expected to top 800 by Oct 2016 to handle load from Avago.

“RF’s FY16 contribution is forecasted to be record high at circa RM600 million while Chipfab to chip in another RM60 million in CY16,” it said.

HLIB Research said Inari showcased the conceptual design of Batu Kawan factory.

“It will be a 5-storey premise yielding a total floor space of 54.8k sqm. Initial plan is to house two new businesses should they materialise.

“Reiterate Buy after raising target price to RM4.41 as we roll forward out valuation to CY16,” it said.