KUALA LUMPUR (Jan 11): Kenanga Research has maintained its “market perform” rating on Inari Amertron Bhd at RM2.64 with a lower target price (TP) of RM2.60 (from RM2.85) and said it does not expect Inari to be impacted by news that consumer electronics giant Apple Inc might be dropping Broadcom Inc's chip from its devices as it is involved in RF filters which are more complex in design and unlikely to be replaced in the short term.
In a note on Wednesday (Jan 11), the research house however said the growing inclination of the US smartphone maker to develop its proprietary chipsets to command control of the supply chain will likely create adverse sentiment towards its suppliers.
Kenanga said this is not the first time that the US smartphone maker has hinted on growing its in-house chip design capabilities in order to have better control of its supply chain, and the emphasis on this strategy is likely to remain given the experience from the chip supply disruption saga during the pandemic.
“That said, we keep our forecast with the expectation of Inari’s RF business to remain intact but trim our valuation to account for the increased adverse sentiment towards players involved in the US smartphone supply chain.
“We maintain our forecasts but trim our TP by 8.7% to RM2.60 on lower valuation,” it said.