Positive on Inari’s RM100 million matching grant from Mida
KUCHING: Inari Amertron Bhd’s (Inari) RM100 million grant awarded by the Malaysian Investment Development Authority (Mida) is a positive surprise and believes this is a testament to the company’s capabilities.
Following the acquisition of the P-21 plant for the setting up of Inari Integrated Systems (IIS), a whollyowned subsidiary of Inari, Mida awarded RM100 million matching grant to Inari to upgrade the plant and for the purchase of equipment and machineries.
This is also to power Inari’s next growth engine in the areas of advanced communication chips and die preparation.
Maybank Investment Bank Bhd (Maybank IB Research) in a report said it sees further earnings upside as Inari populates P-21, its largest plant, over the next nine to 12 month for mass production.
For this, it expect Inari’s capital expenditure (capex) to hit RM150 million to RM200 million in the financial year 2016 (FY16) and FY17.
Meanwhile, AllianceDBS Research Sdn Bhd ( AllianceDBS Research) believe that the recent grant is a clear sign that Inari, through IISB, had most likely secured new business from Broadcom, following the latter’s merger with Avago.
“We have long highlighted that opportunities exist for Inari because Broadcom is a fabless semiconductor company, as it only focuses on chip design and development, while the manufacturing process is outsourced entirely to foundries and OSAT.
“Furthermore, Inari has recently purchased a factory building (Plant P21) for approximately RM23 million and is refurbishing the unit into a new 200,000 square feet plant (an increase of 60 per cent floor space) over the next few months.