Inari rises 6% on strong fundamentals

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KUALA LUMPUR (March 5): Electronics manufacturing services provider Inari Amertron Bhd rose as much as 6% today after the stock was highlighted by Insider Asia as the stock of the day on the stock’s strong fundamentals.

At 10.57am, Inari (fundamental: 2.7; valuation: 2.1) climbed 13 sen or 4.2% to RM3.26, with some 9.8 million shares done.

Earlier, the counter gained as much as 20 sen or 6.4% to reach a high of RM3.33 and was among top gainers on the board.

In a note today, Insider Asia said the company has a strong balance sheet with net cash of RM83.7 million or 12 sen per share at end-Dec 2014, compared to RM8.8 million in FY11.

“From FY2011 to FY2014, sales and pre-tax profit grew by compounded annual growth rate (CAGR) of 87.9% and 73.5%, respectively. Shareholders’ equity increased by a CAGR of 78.5% to RM258.2 million during the same period,” said the research house.

Insider Asia also noted the 19% year-on-year increase in sales for the first half of 2015, while pre-tax profit rose 52.1% to RM73.9 million, due to higher trading volumes, driven by high demand for smartphones and mobile devices.

Meanwhile, US-based Semiconductor Industry Association (SIA) recently reported that global semiconductor sales rose 8.7% y-o-y in January to US$28.5 billion, the highest ever January sales figure.

Based on the higher sales for the month, the association said that the industry was off to a promising start in 2015.

“Global sales have increased on a year-to-year basis for 21 consecutive months and remain strong across most regions and product categories,” said John Neuffer president and chief executive officer of SIA.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)