The share price of INARI has slid from a peak of RM4.30 in late November 2021 to as low as RM2.36 (a 52-week low) in July
2022 before closing at RM2.66 yesterday.
Following the rebound, the share price is expected to continue its upward momentum as the stochastic indicator is set to
climb out from the oversold area while the stock price has crossed back above the lower Bollinger Band. Thus, Kenanga believes that the share price will rise further to challenge resistance levels of RM2.92 (R1; 10% upside potential)
and RM3.05 (R2; 15% upside potential)
The stop loss level is pegged at RM2.40 (representing a 10% downside risk). Fundamentally speaking, INARI is involved in the electronics manufacturing services (EMS) industry, providing Outsourced Semiconductor Assembly and Test (OSAT) niche services in Radio Frequency (RF) System in Package (SiP) for smart mobile devices, fiber-optic transceivers, and other electronics manufacturing services.
Earnings-wise, the group reported a net profit of RM85.9m in 4QFY22 compared with a net profit of RM85.4m in 4QFY21.
This took 12MFY22 bottom line to RM388.5m (versus RM324.3m previously). Based on consensus forecasts, INARI’s net earnings are projected to come in higher at RM439m in FY June 2023 and RM486.2m in FY June 2024, which translate to forward PERs of 22.5x this year and 20.3x next year, respectively.
