KUALA LUMPUR: Inari Amertron
's full-year earnings ending June 30, 2017 hit record levels once again with 32% year-on year growth to RM193mil driven by both higher revenue and margin expansion.
The core profit beat Affin Hwang Capital Research's expectations by 8%, but was 3% lower than street expectations.
Revenue was up 13% over the previous year to RM1.17mil as FY16 was impacted by an inventory correction.
The better margins in the year under review, according to Affin Hwang Research on s accorded to its maiden contribution from the new IRIS IR led product.
"Production was running at its installed capacity of five million units/month towards the latter part of 4QFY17. This contributed to the 26% and 9% quarter-on-quarter surge in 4QFY17 revenue and core profit respectively.
"We estimate that the IRIS IR chip would have contributed nearly RM26mil to Inari’s topline during the quarter, or 8% of group revenue," it said on Wednesday
Affin Hwang Research has raised its FY18-19E earnings per share estimates by 7% to 8%. Based on a stock valuation of 20 times CY2018E earnings per share, the target price has been raised to RM3.
The research house maintains its "buy" call, but advises caution against risks of a slowdown in global demand for smart devices, rapid erosion in average selling price and loss of customer base.
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