KUALA LUMPUR (Jan 12): CGS-CIMB Securities has maintained its “add” rating on Inari Amertron Bhd at RM2.65 with an unchanged target price of RM3 and said it expects RF to remain the major growth driver for Inari, driven by new value-added processes in new generation smartphones beyond 2023.
In a note on Wednesday (Jan 11), the research house said Inari’s 54.5%-owned subsidiary Yiwu Semiconductor International Corp’s (YSIC) plant construction is on track for completion in 3Q2023, with the initial production line set up by 4Q2023.
CGS-CIMB said YSIC will be mainly involved in assembly and test services, including system-in-package assembly, for the China market.
”We estimate YSIC could contribute up to one billion yuan (RM650 million) in revenue once its Yiwu plant is fully operational.
“To recap, Inari will contribute 100% of its shares in Amertron Technology Kunshan valued at 491 million yuan (RM316.6 million) and new investment of 430 million yuan (RM277.2 million) for a 54.5% stake in YSIC,” it said.
Commenting on recent reports, the research house said even if Apple successfully designs its in-house RF chips, it will still require a few years to secure alternative suppliers to handle the American smartphone makers’ volume as these RF wafers are fabricated at a specialised wafer fabs.
“Overall, we believe Inari’s RF division growth prospects are intact as our channel checks indicate the group is already working on new processes technology to support new-generation smartphone models,” it said.