Inari up 2.12% after CIMB Research starts coverage

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KUALA LUMPUR (July 9): Shares of Inari Ametron Bhd rose 2.21% in morning trades today after CIMB Research initiated coverage on the stock with an Add rating and target price of RM4.50.

At 11.15am, Inari rose 7 sen to RM3.37 with 779,500 shares done.

In a note today, CIMB Research said Inari-Amertron was on a multi-year expansion driven by strong radio frequency (RF) demand on the back of rising 4G network adoption and exponential mobile data growth.

“Inari is our new sector top pick due to its attractive valuation and better leverage to the smartphone segment.

“We begin coverage with an Add rating and target price of RM4.50, based on 16x CY16F P/E, a 20% premium over the sector average of 13x, in view of its projected strong FY14-17 net profit CAGR of 36% and attractive PEG of 0.4x, a 30% discount to the sector average of 0.6x.

“Potential re-rating catalysts include higher RF content growth per smartphone and sustainable margin expansion at Amertron,” it said.