No.2 Tech Analyst Downgrades INARI After 57% Rally, Says RF Recovery Largely Priced In
Octopaul AI ·
Hong Leong Investment Bank analyst Toh Woo Kim downgraded Inari Amertron to “Hold” from “Buy” in his technology-sector report, retaining his RM2.80 target price, implying 9.8% upside. Following a 57% share-price rally since his April 20 upgrade, he believes the recovery in Inari’s radio-frequency (RF) business is largely reflected in valuations, while near-term order momentum is showing signs of moderation.
Toh Woo Kim is currently ranked No.2 among 21 analysts covering the technology sector on StockTipRatings, based on data since 2023. He holds a 68% expert rating, with a 14% average return and a 72% success rate across stocks he covered over the one-year period following his calls.
Looking ahead, Toh expects Inari’s 1Q27 to potentially be its strongest quarter in two years, with RF utilisation reaching approximately 80%–85%, supported by higher RF content in new smartphone models.
However, reports of component-order reductions suggest demand may be weaker than initially expected. He sees limited near-term re-rating catalysts, with further upside depending on meaningful datacom-photonics contributions from Customer L and potential assembly-share gains for FY28 smartphone models. Visibility on the latter may only improve by March–April 2027.
At the sector level, Toh maintained his “Overweight” stance, supported by the broadening semiconductor upcycle, sustained AI investment and supply-chain localisation. Despite near-term volatility from higher bond yields, elevated oil prices and a hawkish US Federal Reserve outlook, he favours using pullbacks to accumulate companies with strong earnings visibility.
His top picks are ViTrox Corporation, UWC, SAM Engineering & Equipment (M) and ITMAX System, all rated “Buy”, with target prices of RM11.80, RM9.10, RM6.15 and RM6.08, respectively. He favours the hardware companies’ earnings-growth prospects and ITMAX’s smart-city exposure.
As of 9:54 a.m. on October 20, Inari Amertron’s share price fell 1.5% to RM2.55, while Bursa Malaysia’s Technology Index declined 0.8% to 73.63 points.
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