Maybe some sell because: 1) To realise profits, 2) High PE, overvalue but cannot see high growth, 3) Good QR (Q1) but no surprise, 4) Expansion - not much progress, seems like not easy to expand to other geography beside China, 5) Six months moratorium - end around September (hopefully they don't sell their shares), 6) Order book - remaining order book around 20 millions (my personal main concern - the current order book can contribute to normal results in Q2, however if management cannot secure new projects, then Q3 & Q4 ice cream). Lastly, i think the management should do more online engagement to explain their business, update progress and share their future plan, bukan syiok sendiri just because you the only one public listed company in upstream business. I will continue to top up from time to time (not all in la) and give more time to the management to see if they can performance (especially QR for Q3 & Q4). Good luck all
no doubt going to drop atleast to rm1.. pe is too high.. no new orderbook.. and they only relying to one single customer that contribute 70% revenue from xiamen only.. could not make any growth because the top 3 owner are too slow...
@pang72 is not a bit nervous. Oppstar obviously big crash.. in our word it is called as kaw kaw crash. Take ur profit while u still can.. better late than never
*OPPSTAR (Maintain BUY, TP at RM2.18 based on 50x FY24 PE)*
• *Missed expectations.* Oppstar reported a softer 2QFY24 core net profit of RM4.0m (-25% qoq), bringing 1HFY24 core net profit to RM10.4m which made up 37% of our/consensus full-year estimates. The negative deviation was due to the lower-than-expected turnkey project contribution alongside the higher headcount costs.
• *1HFY24 revenue and core net profit* made up 50%/49% of 2023 revenue and net profit, with strong 1QFY24 contribution offset by a softer 2QFY24. Note that the previous turnkey projects have been fully billed alongside the absence of meaningful turnkey project contribution, hence the gap of lower 2QFY24 revenue (-11% qoq).
• Alongside the higher headcount costs, core net profit dropped 25% qoq. Turnkey design services contributed 67.8% (-2.3ppt) of the group’s total revenue.
• *New collaboration to spearhead growth.* Oppstar had on 13 Jul 23 entered into an MOU with Chen Junhua and Shenzhen City Yixin Investment (Yixin) with an intention to jointly establish an investment holding company and an IC-related product company to be based in Shanghai.
• Chen Junhua is the controlling shareholder of Xiamen KirinCore IOT Technology (XMKC; one of the major customers of Oppstar) while Yixin’s main business is to invest in emerging industries such as the IC industry.
• Note that 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 which can potentially create an additional revenue stream for the Oppstar Group.
• Following that, the holding company, Shanghai Longhuixin Integrated Circuit Group Co. (Longhuixin) has been incorporated in China on 15 Aug 23 with a shareholding stake of 50:45:5 and a paid-up capital of Rmb10m.
• *Multi-pronged strategies to aggressively capture sea of opportunities.* Besides a wider geographical expansion for its design services, continuous customers engagement for full and IP turnkey and China expansion for product development, the group is also building relationships with foundries for better business traction and sustainability.
• On this front, it has been gaining traction with a global leading foundry. Additionally, Oppstar has added two new customers (each from NEA and SEA) and is expecting to secure one more SEA customer with earnings traction to follow in subsequent quarters.
• In the NEA areas, its expansion to Japan is in progress with the group having to obtain the ‘haken’ licence which allows it to directly hire foreign engineers for projects in Japan. We believe the gap of earnings shortfall could be swiftly closed-up in the next two quarters.
• After model updates, we cut our FY24-25 earnings by 16%/11% to account for slower turnkey project contribution.
• *Maintain BUY with a lower target price of RM2.18 (from RM2.53),* based on a rollover 50.0x 2024F PE. As there are no comparable local listed peers for valuation purposes, our valuation yardstick is based on a 10% premium of its global peers’ average two-year forward PE
The above is abstracted from one of the investment bank who did the post result write up. Its not my opinion or call to buy or sell. Its for sharing information purposes only.
Support doesn't mean it will goes up as Director normally no responsibilities to help push up price and they also affordable to hold as their urge to immediately take profit not so urgent like us.
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Like Hong Kong artist...Anita Mui ..sing :...Why why Tell Me Why........