PETALING JAYA: Stratus Global Holdings Bhd is well-positioned to benefit from the healthy global wafer fab expansion pipeline.
Stratus is one of the few listed Malaysian companies offering direct exposure to the front-end semiconductor industry through its cleanroom automated material handling system (AMHS) solutions.
The group listed on the Main Market of Bursa Malaysia yesterday.
Global market research and intelligence firm, Yole has forecast that more than 50 new eight-inch and 12-inch wafer fabs are expected to be built worldwide over the next five years. This means the demand for AMHS will be strong.
Kenanga Research said Stratus will gain a natural pathway to penetrate larger and higher-value 12-inch fab projects.
“Coupled with its outstanding order book of RM108mil the group is well positioned to deliver sustained order replenishment and strong earnings visibility,” it said.
According to the research house, it viewed the group’s hybrid AMHS capability as a key competitive differentiator.
Stratus’s solutions combine conveyor systems with selective overhead hoist transport (OHT), enabling customers to optimise both capital expenditure and operational efficiency according to their production requirements.
“We believe this cost-efficient solution is particularly well suited for mature-node wafer fabs and advanced packaging facilities, where a full OHT deployment is often uneconomical,” Kenanga Research said.
It added it has placed a “not rated” call on the stock with fair value of RM2, based on 30 times financial year 2028 (FY28) earnings per share (EPS), representing about 41% discount to local peers and around 38% discount to regional peers.
“Nevertheless, we expect the valuation gap to narrow as the group scales its operations, expands its customer base and delivers sustained earnings growth.
“Given its differentiated exposure to the semiconductor factory automation market and favourable industry outlook, we view the current valuation as attractive and undemanding.”
Meanwhile, Public Investment Bank Bhd too agreed that Stratus will benefit from the global semiconductor expansion.
It said semiconductor manufacturers globally are on track to invest over US$500bil for new facilities while expanding footprints until 2030.
“Each new multi-billion-dollar fab inherently requires substantial investment in advanced AMHS infrastructure.
“Advanced nodes demand ultra-precise, automated systems to protect yields, and Stratus has established engineering capabilities and project execution expertise,” Public Investment Bank said.
Furthermore, Stratus’s management is looking at securing two or four projects this year, with the possibility of winning all four by FY28.
Each project is between US$20mil to US$45mil, the total automation opportunity across the four fabs could reach US$500mil in the next four to five years.
“If the expected contracts are secured by July or August, management expects a 50% to 60% revenue recognition in FY27, providing meaningful earnings upside.
“The group is also bidding for contracts from another key customer under the Phase 1 Plant 3 project in the northern region, with an estimated AMHS project value of US$100mil. Phase 2 will have another larger foundry project.”
On its results, Public Investment Bank said for the first quarter of FY27, Stratus’s AMHS sales were at RM34.8mil while core net profit came in at RM8.4mil.
As Stratus’s revenue is mostly in US dollars, continued appreciation of the ringgit could reduce reported revenue and margins unless offset by operational efficiencies or pricing adjustments.
It does however expect earnings momentum to pick up towards the second half of 2027 due to completion of larger projects.
With that, Public Investment Bank said it will maintain an “outperform” call on the group with a target price of RM1.72, also based on 30 times FY28 EPS.
