Technical Analysis:

Fundamental Analysis:

1. Financial Overview

a. Cash Ratio:

• The company's cash and bank balances as of 30 September 2024 amounted to RM10.23 million, while short-term funds stood at RM71.69 million, indicating strong liquidity.
• The current liabilities are RM2.75 million, resulting in a high cash ratio of approximately 29.8x (cash + short-term funds divided by current liabilities), showing that the company has sufficient liquid assets to cover its short-term obligations.

b. Profit Margin:

• For the 6-month period ended 30 September 2024, Oppstar recorded revenue of RM35.18 million and a profit before tax (PBT) of RM1.27 million, indicating a profit margin of 3.6%.
• The net profit margin is significantly lower than the same period in 2023 due to a reduction in gross profit and increased operational costs.

c. Net Asset Value (NAV):

• As of 30 September 2024, the net assets amounted to RM148.04 million, with a net asset value per share of RM0.23.

2. Reasons for Losses or Profit

The company's profitability was impacted by several key factors:

1. Higher Labour Costs:

   • The headcount of engineers increased from 252 in 2023 to 296 in 2024, raising operational expenses.

2. Lower Turnkey Design Revenue:

   • Revenue from turnkey design services decreased due to lower billings from a key project.

3. Initial Costs for New Business Segment:

   • The new semiconductor wafer and component sales segment contributed RM11.67 million in revenue but incurred higher initial costs, reducing overall profit margins.

4. Administrative Expenses:

   • Administrative expenses increased by RM0.22 million in the latest quarter, further impacting profitability.

3. Upcoming Prospects

Oppstar's prospects remain promising despite current challenges:

1. Semiconductor Industry Recovery:

   • The expected recovery in the global semiconductor market presents opportunities for growth.

2. New Business Initiatives:

   • The company has secured several new projects and is in discussions for additional opportunities, signaling potential future growth.

3. Expansion Plans:

   • Oppstar is focusing on expanding its sales of semiconductor wafers and components to diversify revenue streams.
   • The company is also investing in new offices in strategic locations, such as Singapore, Taiwan, and Japan, to strengthen its presence in key markets.

4. Strategic Partnerships:

   • Oppstar is exploring partnerships with foundries for chip manufacturing and plans to invest in post-silicon validation services, which is expected to drive future growth.

5. Talent Acquisition and Retention:

   • The company is actively working on attracting and retaining top-tier talent to improve its capabilities in IC design and validation services.

In summary, while Oppstar faces short-term challenges with reduced profits and higher costs, the company's strategic initiatives in diversifying revenue streams, expanding global presence, and partnering with industry players are expected to improve its financial performance in the medium to long term.