INARI - A Heart Wrenching Stock to Many (1)

I 'm impressed, after reading the latest Q report announced yesterday. Let check again what are the changes after 3 Q FY 15.

PARAMETERS

06/30/11

06/30/12

06/30/13

06/30/14

03/31/15 (3Q)

Net Cash from Operating Activity

19,057,330

18,216,958

70,598,000

40,550,000

110,561,000

Inari has never let me down, so far. My TP 2 - RM 3.82 remained unchanged!

Inari, GREAT JOB!

Cheers!

YiStock

15.05.2015

"Hearth-Wrenching- Having a painful emotional impact; causing grief or distress" - Wiktionary

Inari Amertron - A typical “小兵变大将“ successful business story that causing hearth-wrench to many investors, those do not believe, partially believe and even those that fully believe, be it individual, and perhaps institutional investors. Those missed the opportunity, those continue to miss the opportunities'; those consistently bought -sold-bought-and sold-again; to even those that hold (value investors), will grudge at different intensity, because of not taking the advantage of the up-down of the price. They feel blessed, at the same time, cursed...that's why it is hearth-wrenching (揪心)

In merely 4 years, the business has grown from RM 63.5 million market cap. in year 2011, to current RM 2.2 billion. A 35 times (3500%) increased in market cap. Share price from RM 0.50, goes all the way to RM 3.40 per share. 

To Value Investors, share "price" will eventually reflect the "value" of the company, so long as enough time is given. But how much time is enough? The answer is "forever", as long as the company continue to create value for investors. 

Let look at Inari's financial statement. Pay attention not only to the income statement, every detail in the balance sheet should be looked into carefully.

 

*TTM's data are estimation. My personal estimation of EPS for complete FY 15 - FY 16 is RM 0.20 - RM0.24 per share (RM 1B revenue @ average 14% or highest 17% historical net margin)

 

Basic Analysis	FY 2011	FY2012	FY2013	FY2014	FY2015*
Dupont's ROE	41.35%	23.25%	26.22%	37.52%	36.81%
Return of Asset	18.40%	12.98%	11.07%	19.51%	22.26%
Return of Invested Capital	51.46%	36.37%	22.25%	34.0%	41.37%
Current Ratio	1.1	1.55	1.62	2.07	2.44
Debt To Equity Ratio	1.25	0.79	1.37	0.92	0.65
Asset Turn Over	1.17	1.44	0.93	1.82	1.60
Receiveable Turn (days)	69	47	91	54	56
Dividend Payout Ratio	16.06%	46.2%	40.2%	32.4%	34.57%
Earning Yield (%)- ex-rights listed	21.15%	14.26%	10.15%	7.05%	5.90%

Valuation (Post Rights Share Listed)

1) PE Ratio (inlcude rights share) against TTM's EPS at RM 0.1820 per share

> against PE 18 (average of Gtronic, SkpRes, Unisem, JCY,MPI, VS), Share price is POSSIBLY traded at RM 3.27(RM 0.182 EPS x 18 times) - Immediate  1st TP

 

> against PE 21 (compare with Gtronic with Fundamental score at 3.00; Inari at 2.7), share price is possibly traded at  RM 3.82 (RM0.1820 EPS x 21 times) - 2nd TP

 

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2) PE Ratio (include rights share) against RM 0.20 - RM 0.24 EPS (My personal target of EPS for complete FY 15 - FY 16 based on RM 1B revenue @ average 14% or highest 17% historical net margin)

 

> against PE 18 (average of Gtronic, SkpRes, Unisem, JCY,MPI, VS), Share price is POSSIBLY traded at RM 3.60(RM 0.20 EPS x 18 times) to RM 4.30 (RM 0.24 EPS x 18 times)

 

> against PE 21 (compare with Gtronic with Fundamental score at 3.00; Inari at 2.7), share price is Possibibly traded at  RM 4.20 (RM0.20 EPS x 21 times) to RM 5.04 (RM 0.24 EPS x 21 times)

 

Of course, only GOD knows the future, human don't. Our duty is to keep an eye on company's fundamental, from time to time.

 

 

Happy investing!

 

P/S: Current Market Cap:

 

Inari - RM 2.2 B

JCY - RM 1.5 B

Unisem - RM 1.42 B

Gtronic - RM 1.36 B

MPI - RM 1.24 B

VS - RM 0.9 B

 

小兵终于变大将!