KUALA LUMPUR (March 3): PublicInvest Research has derived a fair value of 92 sen based on a 23x PE multiple to its FY24F EPS of 4.0 sen for ACE Market-bound integrated circuit (IC) design services provider Oppstar Bhd.
In an IPO note on Friday (March 3), the research house said that Oppstar has maintained a good working relationship with its customers over the years by delivering IC design services that meet their specifications and requirements on a timely basis.
It said that as a testament, the company has secured recurring orders/contracts from customers, some of whom are multinational corporations (MNCs) that are headquartered in the United States and Japan.
PublicInvest said Oppstar’s IPO is expected to raise approximately RM104.3 million from the issuance of 165.5 million new shares.
Besides utilising 11.5% of the proceeds for research and development (R&D) expenditures, 48.0% and 24.0% of the proceeds are allocated for expansion of the workforce and establishment of new offices respectively, it said.
The research house said Oppstar’s growth will be driven by: i) expansion of its workforce, ii) expansion of its geographical footprint, iii) business expansion through investments and acquisitions, iv) expansion of its post-silicon validation services, v) intellectual properties (IPs) development, and vi) expansion of its collaborations with tertiary institutions.
“Key drivers may include: i) growth in semiconductor industry, and ii) continuous technological advancements in end-user products.
“Key downside risks, among others, include: i) competition from industry players, ii) dependency on certain major customers, iii) dependency on its ability to retain and attract skilled engineers, iv) foreign exchange rate fluctuation, and v) potential infringement of IP rights,” it said.