Inari Ametron FY16Q1 Financial Result
| INARI (RM mil) | FY16Q1 | FY15Q4 | FY15Q3 | FY15Q2 | FY15Q1 |
| Revenue | 274.9 | 225.0 | 228.3 | 227.9 | 221.9 |
| Gross Profit | 57.7 | 56.5 | 47.7 | 49.4 | 43.4 |
| Gross% | 21.0 | 25.1 | 20.9 | 21.7 | 19.6 |
| PBT | 43.9 | 39.8 | 38.0 | 40.0 | 33.9 |
| PBT% | 16.0 | 17.7 | 16.6 | 17.6 | 15.3 |
| PATAMI | 45.5 | 40.4 | 38.1 | 40.3 | 33.8 |
| Total Equity | 604.1 | 537.2 | 511.5 | 352.9 | 313.4 |
| Total Assets | 953.9 | 835.2 | 720.1 | 583.5 | 544.3 |
| Trade Receivables | 236.9 | 187.4 | 136.8 | 128.1 | 143.4 |
| Inventories | 178.1 | 145.2 | 139.9 | 134.0 | 135.8 |
| Cash | 282.3 | 296.7 | 260.4 | 141.9 | 89.5 |
| Total Liabilities | 349.8 | 299.9 | 210.2 | 230.6 | 230.9 |
| Trade Payables | 215.9 | 171.3 | 92.2 | 107.3 | 107.9 |
| ST Borrowings | 45.2 | 45.3 | 42.1 | 44.8 | 46.8 |
| LT Borrowings | 31.5 | 22.0 | 21.9 | 14.9 | 15.1 |
| Net Cash Flow | -19.4 | 218.0 | 181.9 | 65.0 | 14.0 |
| Operation | 35.3 | 176.2 | 110.6 | 88.3 | 23.7 |
| Depreciation | 11.6 | 32.5 | 22.4 | 14.3 | 6.7 |
| Investment | -52.8 | -89.0 | -52.7 | -44.9 | -34.4 |
| PPE purchase | 52.8 | 62.4 | 24.8 | 18.4 | 8.5 |
| Financing | -1.9 | 130.8 | 124.1 | 21.5 | 24.7 |
| Dividend paid | 15.3 | 49.3 | 49.3 | 21.0 | 10.1 |
| EPS | 6.24 | 5.57 | 5.69 | 6.59 | 6.00 |
| NAS | 0.83 | 0.74 | 0.71 | 0.58 | 0.56 |
| Net D/E Ratio | Net cash | Net cash | Net cash | Net cash | Net cash |
Inari posted another record-breaking quarterly result with its highest ever quarterly revenue, PBT & PATAMI in FY16Q1.
The management mentioned that favourable forex mainly contributed to this "widely expected" financial result.
In FY16Q1, Inari registered a net forex gain RM3.33mil.
We know that Inari's rise is very closely linked to its largest customer Avago.
Recently Avago acquired Broadcom Corp, a communications semiconductor company, and sold its optical modules business to Foxconn, which is an electronic & optoelectronic manufacturer similar to Inari.
How will these development possibly affect Inari?
Will Inari lose its existing contracts or get more contracts?
I have no reliable insider info and I'm not an expert in this industry. So I really don't know.
What I think is that IF Inari's management foresees potential lower demand for its service, they should slow down or withhold their expansion plan.
However, from analysts reports after Inari's latest analyst briefing, Inari has tabled an aggressive capex of RM100mil for FY16 which is even higher than previous record high of RM62mil in FY15.
From this amount, RM42mil is set aside for machinery, RM15mil for automation, RM8mil for R&D and RM35mil for P13B expansion.
It even showcased the conceptual design of its new Batu Kawan plant which is planned to accommodate 2 news businesses should they materialize, according to HLIB.
What kind of new businesses?
Currently it is still expanding its P13A new facility in Bayan Lepas.
Total RF testers has reached 609 in Oct15 compared to 522 last year. It is expected to reach 800 by Oct 2016.
Management guided that contribution from the new P13 plant will be flat in FY16 Q1 & Q2 but is expected to increase significantly from Q3 onwards.
In my view, it looks like Inari's management is bullish over at least maintaining existing contracts, if not securing more new contracts from Avago as there will be more outsourcing from Avago groups of companies.
No matter what, I think Inari will continue to do well financially in FY16.
Its RF chips are not only used in Samsung and Apple smartphones, but also in those China brands.
I will continue to hold its shares and follow the company's development.
Parallel to its increasing profits, Inari announced its highest ever quarterly dividend of 2.8sen.
Besides, it also proposed its first ever bonus issue with 1 bonus share for every 4 existing shares held.
Maximum new shares issued will be 206.1mil if all warrants and ESOS are exercised before ex-date.
Everything looks good to me at the moment. Hopefully we can hear some good news from Inari in 2016.
| Div (sen) | FY16 | FY15 | FY14 | FY13 | FY12 |
| 1st | 2.3 (0.5) | 1.8 (0.4) | 1.1 (0.4) | 0.8 | 0.6 |
| 2nd | 1.8 (0.5) | 1.1 (0.4) | 0.9 | 0.6 | |
| 3rd | 2.1 | 1.2 (0.8) | 0.9 | 0.8 | |
| 4th | 2.3 | 1.8 | 1.0 (0.9) | 0.8 |
BD, through your experience, do u think the warrant will be entitled to " bonus warrant" too? Or chances of reducing exercise price is higher?
ReplyDeleteHi P.S, I think warrant holders will not get bonus warrant, but the warrant exercise price will be adjusted accordingly. If warrant holders want to get the bonus shares, they have to convert to mother shares before ex date.
DeleteHi BD, do u know how much is the adjusted exercise price for wb? Is it 2x4÷5=1.6? Thanks
DeleteHi BD, having read through their proposal, they did mention on the bursa approval for additional warrants to be issued. Any input?
DeleteHi P.S, Ken Choo,
DeleteAfter thinking a bit deeper, I think warrants holders should get "bonus warrants" with adjusted price and exercise price. I'm not too sure. Sorry can't give a definite answer.