The Bursa Malaysia ACE Market Listing of Oppstar Berhad this morning (March 15) has led to its share price rising at a 225% premium against its initial public offering (IPO) of 63 sen.
The counter was traded at RM2.05 minutes after the bourse opened. At 9.45, its last price was registered at RM2.15 with a trading volume of about 84 million shares.
UOB Kay Hian Research had set a target price of RM2.28 in the run up to the listing on the first-ever listed local IC design house from an undemanding 19.6x FY23F PE.
The research house cited they saw enormous growth opportunities that can supercharge a three-year revenue/core net profit CAGR of 33%/35% from FY22, premised on aggressive workforce and geographical expansions, cutting edge R&D and technology knowhow alongside huge untapped potential augmented by Malaysia’s geopolitical neutrality.
Days before, UOB Kay Hian had initiated a BUY call and a target price of RM2.28, citing the success of Oppstar marks a spectacular two-year net profit CAGR of 528% from FY20, can be traced back to 2014.
The perfect constellation was created with the teaming-up of the group’s ED/CEO Ng Meng Thai, his spouse Lim Eng Hong, Cheah Hun Wah (current ED/CTO) and Tan Chun Chiat (current ED/COO), spearheading Oppstar to new heights.
From providing IC back-end and front-end design services, the group continued on its journey by focusing on FinFET projects, design projects for ASICs, to post silicon validation services and full IC design turnkey in 2020 with superb margins.
Since then, a superior revenue/net profit CAGR of 78%/528% was achieved in FY20. Over the years, the group has secured global giant names under its belt in different geographical footprints with the meaningful IC market size globally. Spearheading growth on twin-turbo drivers.
With key management’s three decades of experience in IC design services, Oppstar has delivered design projects in various types of ICs (ie ASICs, SoCs, CPUs and FPGAs) using 14nm to 5nm advanced nodes, and has also secured projects in 2022 using 3nm process node technology.
Notably, the group has received enquiries from existing and potential customers from different regions for both specific design services and turnkey design services, with up to 200 design engineers required for the enquires. Due to the capacity bottleneck, the group aims to more than double its current headcount of 227 to 500 by 2026.
Oppstar successfully raised RM104.25 million from the initial public offering exercise via the issuance of 165.48 million new ordinary shares. Oppstar will utilise RM50.00 million to expand its workforce and RM25.00 million for the establishment of new offices both locally and regionally. Meanwhile, another RM12.00 million will go towards research and development expenditure along with RM12.65 million for working capital. The remaining RM4.60 million will be allocated for its listing related expenses.
Oppstar’s Executive Director/Chief Executive Officer, Ng Meng Thai said, “Our vision for the company is simple and clear and it is to show the global players that Malaysia is not only known for its back-end semiconductor value chain, but also has the capability to go into front-end semiconductor IC design. I am proud to say that we now serve clients in countries such as China, Malaysia, Japan, Singapore, as well as the USA. As we gradually progress, we continually ask ourselves what we can do to expand our business and continue to build up Malaysia’s profile in the front-end semiconductor space. This was where the rationale to go for a listing came about leading up to this today.”
“With the expansion plans, it will enable us to groom future talent and grow our geographical presence which will progressively help strengthen Malaysia’s front-end semiconductor ecosystem in line with our vision,” he added.
Affin Hwang Investment Bank Berhad is the Principal Adviser, Sponsor, Sole Placement Agent And Sole Underwriter for the initial public offering exercise.
