Coraza poised to ride on semiconductor upcycle
CORAZA Integrated Technology Bhd boasts optimism to capitalise on the boom in demand for semiconductors as the group foresees greater growth opportunities in the sector.
MD Lim Teik Ho said the Covid-19 pandemic has had a positive impact on the semiconductor industry with the push towards digitalisation and the adoption of new technologies.
“As the backbone of all electronic products, semiconductors will be one of the most important sectors, in which technology is expected to play a much greater role than before. Right now, the industry is experiencing an unprecedented boom.
“Coraza provides integrated engineering support to its customers, many of whom are large multinational corporations who are market leaders in their respective field and from high growth industries such as semiconductor, instrumentation, life science and medical devices, telecommunications, aerospace, and electrical and electronics,” said Lim.
Coraza debuted on the ACE Market yesterday, opening at 70 sen and was actively traded before closing at 64.5 sen, at 36.5 sen premium above its IPO price of 28 sen.
Coraza is principally involved in the fabrication of sheet metal and precision machined components, as well as the provision of related services such as design and development and value-added submodule assembly services.
Lim said Coraza has plans to double its manufacturing floor space to meet the growing demand for its services.
The company will first extend its existing factory to house new machines. The extension is expected to be completed by this month.
Coraza also intends to construct a new factory adjacent to its existing factory in Nibong Tebal, Penang to expand its production capacity and capabilities, and enable it to provide new services (provision of finishing services) to customers in the future.
The construction of the new factory will be carried out in three phases and is targeted to be completed by December 2023.
In conjunction with the construction of the new factory, Coraza plans to purchase new machinery over the next three years for both its existing and new plants.
The additional laser, turret and bending machines, which have more advanced functions, will increase Coraza’s sheet metal fabrication capacity by 25%.
The new finishing line will allow it to get the process done in-house as it was previously outsourced.
“The investment into aerospace is a strategy to enhance Coraza’s capabilities in meeting aerospace engineering and quality standards, which are higher than those of other industry segments. This serves as a competitive advantage for the company to engage customers, even for the non-aerospace industry segments.
“Looking ahead, we are positive of our prospects as we continue to strengthen our competencies and competitiveness across the core business segments we operate in,” he further added.
In its latest quarterly announcement, Coraza reported a net profit of RM3.5 million for its third quarter ended Sept 30, 2021 (3QFY21), against RM28.1 million in revenue.
Earnings per share (EPS) for the quarter was 1.13 sen.
For the cumulative nine months ended Sept 30, 2021 (9MFY21), the company achieved a net profit of RM8.9 million on a revenue of RM71.3 million. EPS stood at 2.88 sen.
According to its prospectus, Coraza recorded RM8 million net profit and RM83.7 million revenue in FY20.
The company’s revenues for 3QFY21 and 9MFY21 came mainly from its sheet metal fabrication segment which accounted for RM24.2 million and RM61.3 million or 86% of both its quarterly and cumulative revenues, respectively.
For the current quarter and financial year-to-date, Coraza’s revenue was contributed by customers from the semiconductor industry (approximately 58%) caused by a surge in demand for semiconductor-related products followed by instrumentation and medical and life science industry (approximately 36%).
The listing exercise saw Coraza raise RM33 million from a public issue of 117.8 million new shares at an issue price of 28 sen per share.
The listing also includes an offer for the sale of 21.4 million existing shares to selected investors by way of the private placement.
Based on the enlarged share capital of 428.3 million shares, Coraza’s market capitalisation upon listing would be RM119.9 million.
