CORAZA: Integrated Technology Firm Poised for Explosive Growth Amidst Semiconductor Upswing

A recent research report from RHB highlights a strong outlook for an integrated technology firm, driven by a robust semiconductor equipment upcycle and internal efficiencies. The firm is projected for record-breaking performance in the upcoming fiscal year, leading the investment bank to maintain its ‘Buy’ rating and significant target price upside.

Performance Review and Drivers

The company’s fourth-quarter 2025 results are anticipated to show strong year-on-year and quarter-on-quarter growth, propelled by high utilisation rates and the ramp-up of new projects. This positive momentum is significantly bolstered by the ongoing semiconductor equipment (WFE) capital expenditure upcycle. RHB analysts note that the stock is currently oversold, with its 13x FY26F P/E valuation below the peer average, presenting a compelling investment opportunity.

Future Outlook

Looking ahead, the firm is well-positioned for a multi-year growth trajectory, supported by its exposure to front-end semiconductors, expanding capacities, enhanced secondary processes, and increasing contributions from its aerospace unit. The Semiconductor Equipment and Materials International (SEMI) has revised its 2026 forecast for semiconductor equipment sales upward to USD145 billion, signifying a strong demand environment. Key drivers include the escalating demand for AI-related chips, tight memory supply, and global fabrication facility expansions.

With approximately 80% of its revenue linked to the semiconductor supply chain, and a significant portion exposed to the front-end segment, the company expects a record-breaking FY26. Growth visibility is further enhanced by an expanding total addressable market, new in-house secondary process capabilities, and capacity expansions in Plants 3 and 5, along with new automation project wins. Additionally, its AS9100-certified aerospace segment is set for exponential growth from a low base.

Navigating Challenges

While the weakness of the USD against the MYR presents a headline negative for exporters, RHB believes market concerns are overstated. The impact is expected to be cushioned by strong revenue growth, higher utilisation rates, ongoing process improvements, and strategic repricing initiatives. Furthermore, the company benefits from a natural hedge, with 70-80% of its revenue denominated in USD and 55-65% of its Cost of Goods Sold also linked to the US dollar. Analysts estimate only a 1-2.5% impact for every 1% change in the FX rate.

Investment Recommendation

RHB maintains its forecasts but sees potential upside to FY26F numbers, driven by solid guidance from major semiconductor customers. The investment bank reiterates a ‘Buy’ recommendation with a target price of MYR0.83, representing a 52% upside from the last traded price of MYR0.545. This target price is based on an unchanged 20x P/E, with a 4% ESG discount. Key downside risks include slower-than-expected orders, project discontinuation, escalating material costs, labour shortages, and adverse FX movements. The company’s results are anticipated on 24 February.