Affin raises Inari Amertron profit forecast, TP

Business & Markets 2013
Written by Zatil Husna of theedgemalaysia.com
Wednesday, 04 December 2013 13:47
A + A - Reset
KUALA LUMPUR (Dec 4): Affin Investment Bank raised its earnings forecast for
Inari Amertron Bhd. This is in anticipation of lower taxes for the electroniccomponent
manufacturer.
Affin said in a note today the firm raised its earnings per share (EPS) forecast
for Inari Amertron by 17.3%, 38.8% and 35.4% in financial years ending June
30, 2014 (FY14), 2015 (FY15) and 2016 (FY16) respectively.
“Our FY14-16 EPS forecast are raised by 17.3%/38.8%/35.4% respectively to
account for our more upbeat outlook on the company after our recent meeting
with management.
“Our FY14 EPS upgrade comes largely on the back of a lower tax assumption
of 6% from 20% after obtaining clarification from management that bulk of the
reported 1QFY14 tax was related to recently-acquired Amertron," said Affin.
Affin said it has also increased its target price for Inari Amertron to RM2.18 from
RM1.70. The upgrade is in anticipation of Inari Amertron's stronger earnings on
growing smartphone and tablet business.
Affin however kept its “buy” call for the stock.
“More importantly, Inari is involved in the growing smartphone and tablet
business which should continue to fuel Inari’s strong earnings growth, at least
over the near term.
“With a strong 3-year earnings CAGR of 39%, dividend yields of 5%-7% and
trading at an undemanding 11x CY14 EPS, we continue to rate the stock a
"buy",” Affin said.