KUALA LUMPUR (July 17): Stratus Global Holdings Bhd could see its stock price more than double 12 months post-listing thanks to high exposure to semiconductor now in an upcycle, according to an analyst.

The factory automation firm appears confident of winning at least two of the four tenders with each project valued at about US$20 million to US$45 million, Public Investment Bank said and initiated coverage on Stratus Global with an 'outperform' call and a target price of RM1.72.

If secured, the contracts will provide a massive boost to revenue and earnings for the current financial year ending March 2027, the research house said in a note.

Stratus Global, which specialises in automated material handling systems for the semiconductor industry, has outstanding jobs worth RM108 million that will keep the company busy through the next two years.

The note marks Stratus Global’s first ever analyst coverage ahead of its July 21 listing on the Main Market. The company has raised RM285 million through an initial public offering (IPO) at 80 sen per share. At the IPO price, the Penang-based company would be valued at RM1 billion.

Public Investment’s target price would value Stratus Global at 30 times its forward earnings but a 10% discount to peer average. “We believe the discount is justified” given its high exposure to the semiconductor sector, and heavy reliance on just five key customers, the house noted.

Still, Stratus Global’s listing comes at a time when global semiconductor manufacturers are investing over US$500 billion through 2030 to build new facilities.

Each foundry inherently requires state-of-the-art automated material handling systems equipment worth hundreds of millions of dollars, making Stratus Global beneficiary of the structural expansion in global semiconductor manufacturing capacity, Public Investment added.