1/ Inari has once again topped the list of the most actively traded stock in the BMQ50 index. This is despite a weak quarter, so investors do not seem to care about the fundamentals in the short term. Let me refresh what Inari does: it is an outsourced semiconductor assembly and test (OSAT) company. It is a business that is very sensitive to the economic cycle. When the economy is good, people buy more electronics, and Inari does well. When it’s bad, they buy less, and Inari does not do well.

2/ The last time the company’s PATAMI reached RM90 million was back in Q4 2024. That was on the back of a very strong demand post-COVID, when there was a shortage of components due to the supply shock, and everyone was panic buying and hoarding components. Fast forward to today, we are seeing a repeat of the same story. This time around, it is AI. If you attend any recent annual meetings in Penang, you will notice a lot of semiconductor companies’ CEOs talking about AI.

3/ Everyone is talking about expansion; CapEx and hiring plans are back, and the boss is seeing good days ahead. If you have used any AI tools recently, you will understand that despite all the hype and worries, there is a lot of pent-up demand for more processing power. It seems the AI story is finally coming to Malaysia. The semiconductor companies in Penang are starting to reap the benefits.

4/ Asian semiconductor companies in Korea and Taiwan have already seen their share prices run up a lot in the past 6 months. Is it Malaysia’s turn already? Inari had been the leader in the last cycle—will it lead again in this cycle? It certainly has the track record. Just look at the revenue trend. A big part of the profit is backed by operating cash flow, meaning the earnings are real. So if revenue is improving, profit should follow in the next few quarters. And so will the dividends.