Is OPPSTAR 0275 OPPSTAR BERHAD a semicon star in the making?

 Is  OPPSTAR 0275 OPPSTAR BERHAD a semicon star in the making?



Integrated circuits (IC) and turnkey solutions provider Oppstar Bhd may be listed on the ACE Market but it is not a small company.


At the current price of RM2.18, it has a market cap of RM1.4 billion.


This counter has been one of the star performers among the Bursa listed companies on its maiden day of trading.


Oppstar skyrocketed 286% on its debut on March 15 over its IPO price of 63 sen.


It opened at RM2.05 before touching an intraday high of RM2.95.


Since then, the counter has lost some ground, reaching a low of RM2, which is still way above its IPO price.


In the past year or so, semiconductor stocks have been trending lower on the back of a slowdown in the industry dragged by geopolitical uncertainties.


But in terms of fundamentals, Oppstar should be one of the shining stars.


For one, Oppstar is operating in the front-end semiconductor IC development versus other semi-con players in Malaysia, which are involved mostly in the back-end semiconductor value chain.


This means Oppstar offers a full spectrum of IC design services.


It designs chips used in various industries including telecommunication, consumer electronics, industrial electronics and automotive.


With the advent of 5G technology, artificial intelligence (AI) and the Internet of Things (IOT), Oppstar is expected to benefit from these fast changing technologies.


The company has been posting solid growth over the past 3 financial years.


Net profit rose grew from RM421,000 in FY Dec 31, 2020 to RM7.8 million in FY2021, and RM16.63 million in FY2022.


The full reopening of borders in China will also augur well for Oppstar as the most populous country is its biggest revenue contributor at almost 80%.


Malaysia is Oppstar’s 2nd largest contributor (12.7% followed by Japan (7.5%) and the US (0.1%).


It has a healthy order book of some RM34.3 million as at Jan 30, 2023, which mainly consists of turnkey design services.


As a design company, it has to continuously invest in R&D and it will need to employ more design engineers so it can compete for more orders and tap larger customer base.


As such, Oppstar plans to double its workforce to 500 people in the next 3 years.


Indeed, it is hard to ignore Oppstar’s potential given the space it is in and it appears to be a star in the making.



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