INARI AMERTON BHD

CGSCIMB recently hosted Inari Amertron’s management on a roadshow in London. The research house said it had with 10 buy-side analysts and fund managers from eight investment firms. Inari Amerton was represented by group chief executive officer K.C. Lau and founder and executive director P.G. Ho.

“Investors were interested to learn about the group’s growth prospects following its plan to raise the total floor area by nearly 80% at P13 and P34 from the latest expansion.

“This is part of the group’s strategy to double its revenue within the next three-to-four years.”

Investors were concerned that sluggish smartphone demand would affect Inari’s radio frequency (RF) division, given that RF accounted for 50% of the group’s revenue.

“The group said the volatile nature of the smartphone market was unavoidable but that it was adding new products, such as LED and VCSEL packaging, to cushion the potential weakness.

“However, it remains bullish on a stronger pick-up in RF demand, driven by mobile network migration from 4G to 5G that will require greater RF content in smartphones.”

The group is constructing a new production plant, P34, in Batu Kawan, Penang.

“P34 will be the largest production plant for Inari Amerton, with an estimated floor area of 640,000 sq ft, comprising three factory blocks. The group is targeting to complete the first phase covering 220,000 sq ft in September 2018.

“We understand the first block will be mainly to support a new LED business portfolio for its existing customer, Osram. Inari is planning to add new customers to fill the remaining area in P34, which is expected to be ready in May 2019.”

In addition, CGSCIMB said the group expects to see higher growth contribution from Inari Amertron following a completed asset consolidation exercise with the opening of its second plant in Clark, Philippines.