Coraza set to ride on the semiconductor demand, adoption of new technologies
KUALA LUMPUR: Coraza Integrated Technology Bhd (CIT) is set to ride on the semiconductor boom as it sees no slowdown in spending or expansion by its customers despite the uncertainties brought about by the Covid-19 pandemic.
Managing director Lim Teik Hoe believes the Covid-19 will have a positive impact on the semiconductor industry in the long run, with the push towards digitalisation and the adoption of new technologies.
“Right now, the industry is experiencing an unprecedented boom.
“CIT provides integrated engineering support to its customers, many of whom are large multinational corporations who are market leaders in their respective fields and from high growth industries such as semiconductor, instrumentation, life science and medical devices, telecommunications, aerospace, and electrical and electronics,” he said in a statement today.
He said over the last two years, the company has seen increasing enquiries and orders from its existing and potential customers across all market sectors, especially the semiconductor sector, both locally and from their global headquarters.
CIT is 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 sub-module assembly services.
CIT made its debut on the ACE Market of Bursa Malaysia today, raising RM33.0 million from its public issue of 117.8 million new shares at an issue price of 28 sen per share.
At the opening bell today, CIT share price more than doubled at 70 sen from its initial public offering (IPO) price of 28 sen.
The listing exercise also includes an offer for the sale of 21.4 million existing shares to selected investors by way of private placements.
Based on the enlarged share capital of 428.3 million shares, CIT’s market capitalisation upon listing would be RM119.9 million.
M&A Securities Sdn Bhd is the adviser, sponsor, underwriter and placement agent for the IPO exercise.
On the company’s prospects, Lim said CIT 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, and the extension is expected to be completed by this month.
Apart from the extension, CIT intends to construct a new factory adjacent to its existing factory in Nibong Tebal, Penang to expand its production capability and capabilities, and enable the company to provide new services such as 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, CIT plans to purchase new machinery over the next three years for both its existing and new factory.
“The additional laser, turret and bending machines, which have more advanced functions, will increase CIT’s sheet metal fabrication capacity by 25 per cent.
“On the other hand, 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 CIT’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 said.
In its latest quarterly announcement, CIT reported a net profit of RM3.5 million for its third quarter (Q3) ended 30 September 2021 (FY21) against RM28.1 million revenue.
Its earnings per share (EPS) for the quarter was 1.13 sen.
For the cumulative nine months (9M) FY21, the company achieved a net profit of RM8.9 million and revenue of RM71.3 million.
EPS stood at 2.88 sen.
No comparative figures were available as it was the first interim financial report released by CIT in relation to its earnings, in compliance with the listing requirements.
According to the company’s prospectus, CIT recorded RM8.0 million net profit and RM83.7 million revenue in FY20.
The company’s revenues for Q3 FY21 and 9M FY21 came mainly from its sheet metal fabrication segment, which accounted for RM24.2 million and RM61.3 million or 86 per cent of both its quarterly and cumulative revenues, respectively.
For the current quarter and financial year-to-date, CIT’s revenue was contributed by customers from the semiconductor industry, which is approximately 58 per cent attributed to the surge in demand for semiconductor-related products followed by instrumentation and medical and life science industry of approximately 36 per cent.
