KUALA LUMPUR (Aug 20): Inari Amertron Bhd (KL:INARI) is expected to see a flattish FY2025, weighed down by a seasonal slowdown ahead of September product launches, forex headwinds, and a stronger ringgit against the US dollar. 

In an earnings preview, Apex Securities anticipates Inari's core earnings for the last quarter of the year (4QFY2025) to come in between RM50 million and RM60 million, down 16.4% to flat quarter-on-quarter, bringing full-year forecasts between RM243 million and RM253 million, 16% to 20% lower year-on-year.

More positively, the research house said, the semiconductor manufacturer could enter an upcycle in radio frequency (RF) components in the first half of 2026 (1H2026), supported by stronger RF demand from flagship handsets integrating on-device AI (Edge AI).

Apex Securities said Inari is well-positioned to benefit from the rollout of newly designed AI-capable flagship smartphones. 

These devices, which demand rapid processing and robust connectivity, will require additional RF components to support more frequency bands and tighter filtering, thereby driving RF demand.

According to Bloomberg, the stock is currently rated with eight ‘buy’ calls, including from Apex Securities, 10 ‘hold’ calls, and three ‘sell’ calls.

Apex Securities believes the impact of US semiconductor tariff uncertainty would be “neutral or minimal”, as its key client’s substantial investment pledge in the US could help “shield” supply chains from tariff risks. 

While Inari is expected to see stronger RF chip demand in 2H2025 with a key US client launching a new flagship smartphone in September, Apex Securities cautioned that Inari’s smartphone segment could remain muted as consumers potentially face “innovation fatigue” and minimal design changes.

“We expect the RF content gain for the new product cycle in 2HCY2025 to remain stable as the 5G-driven upcycle has largely played out in recent years,” the research house said.

Apex Securities also highlighted potential merits from Inari’s recent joint acquisition with Netherlands-based Lumileds and China’s Sanan Optoelectronics Co Ltd, despite investor concerns over Lumileds’ loss-making status and the competitive LED market.

The research house has cut its target price to RM2.23 from RM2.94 after lowering earnings forecasts for FY2025-FY2027.

At noon break on Wednesday, Inari shares fell four sen or 2.1% to RM1.91, valuing the group at RM7.24 billion.