PETALING JAYA: Inari Amertron Bhd
’s radio frequency (RF) segment is guided to pick up from June 2023, driven by a new flagship programme.
This is in line with the group’s expansion plans which is said to be on track.
TA Research noted Inari’s primary customer recently secured a multibillion dollar deal with a significant US end-user for the development of 5G RF components, which gives the group’s RF segment confidence in its long-term viability.
On the other hand, Inari told TA Research it expects its other segments to be steady in the coming quarters.
This is following the sluggish market deployment of the optical communication segment, the beginning of production of new optocoupler products in the automotive industry, the high demand in industrial, and the stability of the generic market.
As for its expansion front, Inari said in Malaysia it is in the midst of the construction of a new block at the P34 facility in Batu Kawan, Penang, and is planning for a new facility in proximity to the P34.
In the Philippines, the company is in the planning stage for the construction of a new plant called CK3 while in China, the construction of a new plant in Yiwu, Zhejiang, is on track and expected to be ready by the third to fourth quarter of calendar year 2023 (3Q to 4QCY23).
Inari reported a revenue of RM275.8mil and a net profit of RM57.3mil or earnings per share (EPS) of 1.54sen in the third quarter ended March 31, of financial year 2023 (3Q23).
According to TA Research, Inari’s 3Q23 is often the weakest quarter in the financial year, with its latest revenue and core earnings contracted by 23.5% and 41.3% year-on-year respectively.
“In addition to broad-based weakness amid the semiconductors industry’s downcycle, Inari’s core RF segment typically observes a seasonal slowdown in the second half of the financial year,” TA Research added.
Inari also recorded a drop on its net profit margin in 3Q23 due to weaker utilisation, particularly from the higher margin RF market
However, despite the lower profitability, Inari’s margin remained substantially above the industry average, in part because of continued cost-cutting initiatives.
