KUALA LUMPUR (July 13): Recently-listed integrated circuit (IC) design service provider Oppstar Bhd has entered into a Memorandum of Understanding (MOU) with two parties to look into jointly establishing an investment holding company and an IC related product company in Shanghai, China.

The two parties are Chinese national Chen Junhua, and Shenzhen City Yixin Investment (Limited Partnership), a China-based company that invests in emerging industries like the IC industry, said Oppstar in a bourse filing.  

Chen is the controlling shareholder of Xiamen KirinCore IOT Technology Ltd, a major customer of Oppstar in China that provides IC design, software development, data processing and storage services.

Oppstar said the holding company will be established for the purpose of investing in companies in the IC industry, as well as establishing a technology company engaged in the development of IC products with a paid-up capital of 10 million yuan.

Chen will hold a 50% stake in the holding company, followed by Oppstar with 45%, and Shenzhen City Yixin the remaining 5%.

"Currently, Oppstar and its subsidiaries are principally involved in the provision of IC design services where the group develops intellectual properties (IPs) within an IC and these IPs are owned by its customers.

“The MOU will allow the parties to leverage on each other’s strengths and expertise and allow the parties to develop and co-own the IPs. This will potentially create an additional revenue stream for the Oppstar Group," said Oppstar.

It added that Oppstar's responsibility under the deal is to provide knowledge and technical leadership in IC design and business development, as well as provide technical support for related functions.

Oppstar said the joint venture will contribute positively to the growth of the group, and provide greater synergy and business sustainability through the expansion of its presence in the Northeast Asia region.

In March, Oppstar made a stellar debut on the ACE Market, opening at RM2.05 and closing the first day at RM2.43, a 286% premium over its initial public offering  price of 63 sen.

On Thursday (July 13), Oppstar closed one sen or 0.53% higher at RM1.91, giving the company a market capitalisation of RM1.22 billion.