• INARI recorded FY26 core net profit of RM187.5m (-26% YoY) results are deemed in line, accounted for 102.6% of our FY26F forecast and 96.0% of full-year consensus.
• We remain cautiously constructive into FY27, underpinned by an expanding photonics and advanced packaging pipeline riding the generative AI cycle, alongside recovery from the Philippines fire disruption and a normalisation in RF loading volumes.
• We maintain our FY27F/28F core net profit forecasts of RM213.2m/RM217.3m. We also introduced FY29F core net profit of RM226.6m.
• Maintain HOLD with an unchanged TP of RM2.11 (37.7x FY27F core EPS of 5.6 sen), pending further clarity from today’s QR briefing as FY27 is expected to mark the turnaround.
Results inline. INARI's 4QFY26 core net profit came in at RM46.4m, arrived at after adjusting for exceptional items comprising a fire-incident provision (RM41.9m) and forex gain (-RM1.7m). This brought FY26 core net profit to RM187.5m, down 26.0% YoY, which is deemed in line with our expectations, accounting for 102.6% of our FY26F core net profit forecast and 96.0% of the fullyear consensus estimate.
QoQ. Revenue rose 8.7% QoQ to RM288.9m from RM265.7m in 3QFY26, driven by comparatively higher loading volume in the RF business segment. Core net profit increased 50.6% QoQ to RM46.4m from RM30.8m, mainly due to the RM41.9m fire-related provision recognised in the current quarter following the 10 May 2026 fire incident at the Group's wholly-owned Philippines subsidiary.
YoY. Revenue fell 5.8% YoY to RM288.9m from RM306.7m, mainly due to comparatively lower loading volume in the RF business segment. Core net profit declined by 13.8% to RM46.4m (4QFY25: RM53.8m) mainly due to lower revenue contribution from Singapore (-7.6% YoY) and China (-65.6% YoY).
YTD. For FY26, revenue fell 12.2% YoY to RM1,187.3m from RM1,351.9m, mainly due to comparatively lower loading volume in the RF business segment across the year. FY26 Core net profit fell 26.0% YoY to RM187.5m from RM253.4m, mainly due to lower revenue contribution from Singapore (-15.6% YoY) and China (-16.6% YoY).
Dividend. Declared a fourth interim dividend of 1.37 sen per share (ex-date: 17 Sep 2026), bringing FY26 total DPS to 4.7 sen, compared with 5.5 sen in FY25.
Outlook. Moving forward to FY27, we remain positive on the Group’s medium-term outlook, backed by an expanding photonics and advanced packaging pipeline riding the generative AI cycle, layered on the existing RF and industrial base. The Lumileds joint acquisition was terminated in April 2026 after CFIUS objections, freeing management to refocus on core operations. At Plant CK1 in the Philippines, unaffected areas have resumed operations, while Plant CK2 continued operating normally throughout.
Earnings Revision. We maintain our FY27F/FY28F core net profit forecasts of RM213.2m/RM217.3m. We also introduce our FY29F core net profit forecast of RM226.6m.
Valuation & Recommendation. We maintain our HOLD call with an unchanged TP of RM2.11, based on an unchanged PE of 37.7x applied to FY27F core EPS of 5.6 sen. While the TP implies a 13.7% downside from the current share price, we retain HOLD pending further clarity from today's QR briefing, given FY26 was a transitional year and FY27 is expected to mark the turnaround. Key upside triggers to watch: (i) the datacom photonics segment, where Customer B is targeting a 2x increase in order volumes over FY27-FY28 amid tight optical laser supply, and (ii) INARI's participation in the MAPC consortium, which strengthens its advanced packaging foothold and remains the key catalyst for a re-rating.
Risks. Prolonged weakness in RF loading volumes, Forex volatility, delay in resuming full production after the fire incident.
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.029059 | 4.061288 |
| EUR | 4.678261 | 4.683031 |
| CNY | 0.601267 | 0.601882 |
| HKD | 0.513945 | 0.517555 |
| SGD | 3.163772 | 3.186125 |