Inari Positioned for Earnings Growth Amidst RF and AI Demand
Inari is projected to experience earnings growth starting in 2027, driven by robust demand in radio frequency (RF) and artificial intelligence (AI). MBSB Research maintains a target price of RM2.95, emphasizing the importance of a long-term supply agreement that enhances earnings visibility.
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Inari is expected to rebound in earnings from 2027, backed by a multi-year supply agreement, which solidifies its RF operations' stability. The company's optoelectronics sector, particularly in photonics interconnects, is anticipated to grow significantly due to increasing demand for AI-driven optical communications.
While the current performance has been weak, production volumes are set to rise sharply starting in 2027, with advances in packaging technology expected to enhance RF module integration. The power module segment, focusing on AI applications, is being developed with a pilot line launching in August 2026, although substantial contributions are not forecasted until 2028. The strategic positioning within the semiconductor sector for outsourced assembly and testing services could provide a competitive advantage.
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