KUALA LUMPUR (March 15): Integrated circuits (IC) and turnkey solutions provider Oppstar Bhd surged 286% on its first day of trading on Bursa Malaysia’s ACE Market.

On Wednesday (March 15), the stock opened at RM2.05 and hit an intraday high of RM2.95.

At 5pm, it pared its gains to close at RM2.43, a 286% premium over the IPO price of 63 sen.

At RM2.43, the group has a market capitalisation of RM1.55 billion. Trading volume rose to 199.56 million, making it the second most active stock after Hong Seng Consolidated Bhd.

Malaysia's first listed IC design house, which focuses on application-specific IC, system on a chip, central processing units and field programmable gate arrays, is also the best performing IPO so far this year.

Oppstar's performance on the first day of trading outperformed other ACE Market debutantes this year, namely TT Vision Holdings Bhd, which gained 276% from its issue price of 34 sen, Nationgate Holdings Bhd (jumped 163% from its issue price of 38 sen), Wellspire Holdings Bhd (gained 87% versus IPO price of 23 sen) as well as L&P Global Bhd (grew 82% against IPO price of 30 sen ).

Oppstar’s debut also outperformed the two Main Market-listed companies, namely Kumpulan Kitacon Bhd, which rose 10.29% from its IPO price of 68 sen, and Cape EMS Bhd, which rose 67% from its IPO price of 90 sen.

At the press conference after the successful listing, Oppstar’s chief executive officer Ng Meng Thai said the group’s listing proves that Malaysia is able to enter the front-end semiconductor IC development, despite being known as a back-end semiconductor value chain.

“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 said.

Despite the slowdown in the semiconductor industry, Oppstar will continue to benefit from semiconductor product growth driven by 5G technology, artificial intelligence (AI) and the Internet of Things (IOT), according to Ng.

“There will be a slowdown in the [semiconductor] industry due to geopolitical uncertainties, high inflation and [the] possibility of [a] global recession. But newly listed companies like us will continue to benefit from technologies like 5G, AI, IOT and so on, that will continue to drive the need for these semiconductor products,” he told the media.

In the past three years, Oppstar’s earnings have been in an upward trend. Profit after tax grew from RM421,000 for the financial year ended Dec 31, 2020 (FY2020) to RM7.8 million in FY2021, and RM16.63 million in FY2022.

Revenue also jumped from RM15.96 million in FY2020, to RM29.26 million in FY2021 and RM50.56 million in FY2022.

China is the largest revenue contributor to the group at 79.7%, followed by Malaysia (12.68%), Japan (7.5%) and the US (0.12%).

Oppstar’s order book stood at approximately RM34.29 million as at Jan 30, 2023, which mainly consists of turnkey design services.

Oppstar has earmarked RM50 million for workforce expansion, from gross proceeds of RM104.25 million from the IPO.

The company plans to increase its total headcount by 280 local design engineers and technicians, to compete for more orders and tap larger potential customers.

“We have a plan to increase our total workforce to 500 in the next three years. Now we have 220 employees,” Ng explained.

Meanwhile, RM25 million of the gross proceeds will be used to establish new offices in Penang, India, Singapore and Taiwan, RM12.65 million for working capital, RM12 million for research and development expenses, and RM4.6 million for estimated listing costs.

Affin Hwang Investment Bank Bhd is the principal adviser, sponsor, sole placement agent and sole underwriter for the IPO exercise.