Berjaya Research has initiated coverage on Stratus Global Holdings Bhd with a “Buy” recommendation and a fair value of RM1.78, representing a 122.5% upside from the company’s initial public offering (IPO) price of 80 sen.
The research house said its valuation is based on a target price-to-earnings ratio (PER) of 33 times pegged to Stratus Global’s forecast FY2027 earnings per share (EPS) of 5.4 sen, benchmarked against the average one-year forward PER of local and international listed factory automation solution providers.
Berjaya Research identified three key risks to its valuation, namely a slowdown in global semiconductor capital expenditure, customer concentration risk, and a strengthening ringgit against the US dollar.
Headquartered in Penang, Stratus Global specialises in cleanroom Automated Material Handling Systems (AMHS) for the semiconductor industry.
The company provides integrated factory automation solutions comprising conveyor-based AMHS, hybrid AMHS and Automated Storage and Retrieval Systems (ASRS), supported by its proprietary Transport Control System (TCS).
Its customer base spans both front-end and back-end semiconductor manufacturers across Asia, Europe and North America.
Berjaya Research noted that the company traces its roots to the United States in 1998 and has accumulated more than 28 years of experience in semiconductor factory automation.
The research house said Stratus Global’s competitive strengths include its proprietary hardware and software, end-to-end engineering capabilities and long-standing relationships with multinational semiconductor manufacturers.
Berjaya Research believes the company is well-positioned to capitalise on continued global semiconductor capacity expansion and rising manufacturing complexity.
It said increasing demand for automation solutions is being driven by chipmakers seeking to improve productivity, maximise equipment utilisation and enhance operational efficiency within increasingly sophisticated fabrication facilities.
The adoption of AMHS is expected to continue growing as semiconductor manufacturers invest in higher levels of factory automation.
According to the research house, Stratus Global plans to strengthen its growth through production capacity expansion, deeper overseas market penetration and increased participation in the back-end semiconductor segment.
These initiatives are expected to enhance the group’s execution capabilities while broadening its addressable market.
Financially, Stratus Global recorded a three-year compound annual growth rate (CAGR) of 10.5% in revenue and 6.0% in profit after tax between FY2023 and FY2026.
Berjaya Research highlighted that the company consistently generated gross profit margins exceeding 50%, outperforming many industry peers.
Looking ahead, the research house expects earnings growth to be supported by the execution of the group’s existing order book, an increasing contribution from higher-value hybrid AMHS solutions, and expanded manufacturing capacity alongside overseas business growth.
Berjaya Research said these factors position Stratus Global to benefit from the long-term structural growth of the global semiconductor automation industry.
