KUALA LUMPUR: ACE Market of Bursa Malaysia debutant Oppstar Bhd is projected to register a 13.4 per cent and 46.6 per cent growth in net earnings for the financial year 2023 (FY2023) and FY2024, respectively, said Rakuten Trade Sdn Bhd.

In a note today, the research firm said that the expected net earnings growth of the integrated circuit (IC) design service provider is backed by its order book of RM34.3 million as at end-January 2023.

"Furthermore, in 2022, Oppstar also secured projects using the 3-nanometer (nm) process node technology," Rakuten Trade noted.

It said that the company is capable of designing various IC types, namely application-specific ICs (ASICs), system-on-a-chip (SoCs), central processing units (CPUs), and field-programmable gate arrays (FPGAs).

"The company is planning to increase the total workforce by 280 design engineers and technicians from the current 217 engineers to compete for more orders and contracts, as well as tap into larger potential projects.

"It intends to expand its post-silicon validation services, the last stage of IC development, which would potentially increase its revenue going forward," the research firm said.

As such, Rakuten Trade has recommended a "buy" call on Oppstar with a target price of RM1.08.

Oppstar was one of the most active counters on Bursa Malaysia this morning after its share price jumped to RM2.05, a 225.4 per cent premium over its initial public offering (IPO) price of 63 sen per share.

It has raised RM104.25 million from the IPO exercise via the issuance of 165.48 million new ordinary shares.

The company plans to utilise RM50 million for hiring purposes and RM25 million for the establishment of new offices in Penang, India, Singapore, and Taiwan over the next 36 months.

Another RM12 million would be allocated for its research and development expenditure and RM12.65 million for working capital, while the remaining RM4.60 million would be used to defray listing-related expenses.

At lunch break, Oppstar gained RM1.61 to RM2.24 with 134.89 million shares traded.