KUALA LUMPUR (Nov 28): Inari Amertron Bhd (KL:INARI) fell to a nearly two-month low on Friday, after its first-quarter results missed analysts' expectations.
At 9.30am, the counter was 10 sen or 4.2% lower at RM2.30, valuing the group at RM8.74 billion, with 6.69 million shares changing hands.
Net profit jumped 113.5% for the first quarter ended Sept 30, 2025 (1QFY2026), supported mainly by favourable movements in foreign exchange rates, but quarterly revenue fell 16%.
Overall, the 1QFY2026 performance came in below analysts' estimates, prompting at least two downgrades citing a lacklustre outlook.
CIMB Securities downgraded the stock to 'hold' from 'buy', while PublicInvest cut its rating to 'neutral' from 'outperform'.
CIMB lifted its target price to RM2.50 on valuation roll-forward, whereas PublicInvest reduced its fair value to RM2.29 after deeper earnings cuts.
The downgrade came after the two houses said Inari's 1QFY2026 core earnings accounted for only 18%-19% of their full-year forecasts.
CIMB in a note highlighted the sharp appreciation of the ringgit as an additional drag on Inari’s quarterly performance.
A stronger ringgit against the US dollar reduced translated revenue and squeezed margins during the latest quarter.
Both houses trimmed their earnings projections for FY2026-FY2028, though PublicInvest was more aggressive, slashing earnings by 11%-19% versus CIMB’s 2%-10% cut.
Both expect radio frequency (RF) to remain the swing factor for earnings, given its 60%-plus contribution to group sales.
“While 1QFY2026 performance was weak, we expect RF sales volumes to rebound from 2QFY2026 onwards, supported by resilient demand from new-generation smartphone launches,” CIMB said.
PublicInvest, however, flagged ongoing supply chain realignments triggered by US tariff policies, increasing onshoring in China and continued losses at Inari’s 54.5%-owned Yiwu Semiconductor unit.
It expects global smartphone shipments to grow 3.3% in 2025, driven largely by the iPhone 17 cycle.
Despite differing degrees of optimism, longer-term prospects remain tied to the smartphone replacement cycle, new RF design wins and the roll-out of next-generation Apple devices.