KUALA LUMPUR (April 20): Inari Amertron Bhd (KL:INARI) is positioning for a rebound in the financial year ending June 30, 2027 (FY2027), with analysts highlighting improving prospects in its radio frequency (RF) and datacom photonics segments following the expectation of a softer FY2026.

Hong Leong Investment Bank (HLIB) and RHB Research noted that Inari’s RF segment is set to decline sharply this year, mainly weighed by lower RF component allocations and US dollar depreciation.

However, it is set for a rebound in its revenue in FY2027, underpinned by its US smartphone customers’ market share gains and the transition to its in-house modems, as customers are phasing out Qualcomm’s in favour of its modem. 

"We expect shipments from Inari's key US end-customer to remain resilient and register incremental growth in 2026-2027, standing in stark contrast to projected declines of 13%-15% for the broader smartphone industry and 20-30% for Chinese OEMs (original equipment manufacturers) in 2026," Hong Leong Investment Bank (HLIB) said in a note on Monday.

Separately, RHB anticipates higher RF allocations driven by three key catalysts: the new smartphone cycle may incorporate in-house 5G modems, higher volume from a new foldable phone model, and supplier diversification amid consolidation among key RF suppliers.

The house noted that the datacom photonics segment, which contributed 17% of the group’s revenue, is also set for incremental growth as AI-driven optical demand accelerates.

Furthermore, PublicInvest and Kenanga Research expects the optoelectronic segment to contribute more than a third of the group’s revenue in FY2027-FY2028, an improvement from the first half of 2026, mainly driven by the wafer fab expansion in Singapore.

Meanwhile, CIMB Securities expects the recent termination of Lumileds Holding BV’s joint acquisition to soften Inari’s concerns over potential earnings dilution and limited earnings recovery in the near term, as softer loadings are ahead of its next-generation model launches expected in the second half of 2026.

Conversely, RHB viewed the failed acquisition of Lumileds as "neutral to fundamentals" and "mildly positive" for sentiment, given the market's previous cautious stance on the deal.

PublicInvest also views the termination of the deal positively, "as it removes the overhang of the company's earnings prospects".

Both CIMB Securities and PublicInvest had "hold" and "neutral" calls on the counter, respectively, while RHB kept its "buy" call.

There are now eight "buy" and 12 "hold" calls on the stock, with an average target price of RM1.76, according to the 20 analysts tracked by Bloomberg.

The group was last traded at RM1.70 at the time of writing on Monday, giving it a market capitalisation of RM6.47 billion.