RESULTS UPDATE
Friday, August 22, 2025
FBMKLCI: 1,592.87
Sector: Industrial Products & Services
THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY*
Coraza Integrated Technology Berhad
A Strong Quarter
TP: RM0.66 (+20.0%)
Last Traded: RM0.55
Chan Mun Chun
Tel: +603-2167 9731
mcchan@ta.com.my
www.taonline.com.my
Review
- Stripping out the exceptional foreign exchange net loss amounting to RM2.5mn, CORAZA’s IHFY25’s core profit of RM7.8mn came in at 63.9% and 63.6% of our and the consensus’ full-year estimate, respectively. We deem the results to be within expectations, as we anticipate upcoming quarters could be weaker with customers turning more cautious in light of the potential tariffs imposed on semiconductors by the US.
- YoY, the group registered a core profit of RM7.8mn in IHFY25 as compared with a core net loss of RM1.7mn, while revenue was 88.7% higher at RM78.3mn. The robust earnings performance was mainly supported by the semiconductor industry’s gradual recovery and strong demand for high-value products from key customers.
- QoQ, 2QFY25’s core profit surged 71.3% to RM4.9mn, driven by higher revenue and margin expansion as the group delivered high-value products to meet the increasingly complex demands of key customers. Revenue also rose 18.6% to RM42.5mn.
- It maintained a healthy balance sheet with a net cash position of RM4.9mn as at the end of 2QFY25.
Outlook
- We remain cautiously optimistic as the group is supported by a healthy order book of approximately RM70.0mn. Management highlighted that direct exposure to the US accounts for less than 5% of total revenue. Nonetheless, we believe that potential semiconductor tariffs could disrupt the global supply chain and exert pressure on its key multinational customers.
Impact
- Maintain FY25 to FY27 earnings forecasts.
Valuation & Recommendation
- No change to our target price of RM0.66, based on a PE multiple of 22.0x CY26F EPS. Maintain a Buy call on the stock.
- Key downside risks include i) dependence on major customers, ii) raw material price fluctuations, and iii) potential imposition of semiconductor tariffs by US.
Share Information
| Bloomberg Code | CORAZA MK |
|---|---|
| Stock Code | 0240 |
| Listing | Ace Market |
| Share Cap (mn) | 493.6 |
| Market Cap (RMmn) | 271.5 |
| 52-wk Hi/Lo (RM) | 0.675/0.335 |
| 12-mth Avg Daily Vol (‘000 shrs) | 2,594.9 |
| Estimated Free Float (%) | 35.8 |
| Beta | 2.2 |
| Major Shareholders (%) | |
| Paul Heng Weng Seng – 42.1% | |
| Liew Sow Ying – 16.7% |
Forecast Revision
| FY25 | FY26 | |
|---|---|---|
| Forecast Revision (%) | 0.0 | 0.0 |
| Net profit (RMmn) | 12.2 | 14.8 |
| Consensus | 12.3 | 14.1 |
| TA’s / Consensus (%) | 99.4 | 105.4 |
| Previous Rating | Buy (Maintained) | |
| Consensus Target Price | 0.66 |
Financial Indicators
| FY25 | FY26 | |
|---|---|---|
| Net gearing (x) | Net Cash | Net Cash |
| CFPS (sen) | 5.2 | 3.8 |
| P/CFPS (x) | 10.5 | 14.5 |
| ROAA (%) | 8.5 | 9.4 |
| ROAE (%) | 6.0 | 6.7 |
| NTA/Share (RM) | 0.3 | 0.3 |
| Price/ NTA (x) | 1.9 | 1.7 |
Scorecard
| % of FY | ||
|---|---|---|
| vs. TA | 63.9 | Within |
| vs. Consensus | 63.6 | Within |
Share Performance (%)
| Price Change | CORAZA | FBM KLCI |
|---|---|---|
| 1 mth | 12.2 | 4.5 |
| 3 mth | 14.6 | 3.1 |
| 6 mth | 5.8 | 0.1 |
| 12 mth | 32.5 | (2.6) |
(12-Mth) Share Price relative to the FBMKLCI
Source: Bloomberg
Table 1: Earnings Summary (RMmn)
| FYE Dec (RM mn) | FY23 | FY24 | FY25F | FY26F | FY27F |
|---|---|---|---|---|---|
| Revenue | 80.7 | 109.0 | 120.6 | 152.8 | 180.8 |
| EBITDA | 5.2 | 14.4 | 26.5 | 35.1 | 38.0 |
| EBITDA margin (%) | 6.5 | 13.2 | 22.0 | 23.0 | 21.0 |
| Dep. & amortisation | (8.7) | (9.0) | (9.3) | (14.7) | (14.2) |
| EBIT | (3.5) | 5.4 | 17.3 | 20.5 | 23.7 |
| Net finance costs | 0.0 | 0.5 | (1.2) | (1.0) | (0.7) |
| EI | 0.0 | (4.9) | 0.0 | 0.0 | 0.0 |
| PBT | (3.4) | 1.0 | 16.0 | 19.5 | 23.0 |
| Taxation | 0.8 | 3.4 | (3.8) | (4.7) | (5.5) |
| PAT | (2.7) | 4.4 | 12.2 | 14.8 | 17.5 |
| Core PAT | (2.7) | 8.1 | 12.2 | 14.8 | 17.5 |
| Core EPS (sen) | (0.5) | 1.6 | 2.5 | 3.0 | 3.5 |
| Core EPS Growth (%) | (115.6) | (404.0) | 49.9 | 21.5 | 18.1 |
| PE (x) | (101.6) | 33.4 | 22.3 | 18.3 | 15.5 |
| DPS (sen) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Dividend yield (%) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Table 2: 2QFY25 Results Analysis (RMmn)
| FYE Dec (RM mn’) | 2QFY24 | 1QFY25 | 2QFY25 | QoQ (%) | YoY (%) | 6MFY24 | 6MFY25 | YoY (%) |
|---|---|---|---|---|---|---|---|---|
| Revenue | 21.8 | 35.8 | 42.5 | 18.6 | 95.2 | 41.5 | 78.3 | 88.7 |
| – Fabrication of sheet metal | 19.6 | 30.7 | 35.3 | 15.0 | 80.5 | 37.7 | 66.0 | 75.2 |
| – Precision machining | 2.2 | 5.1 | 7.2 | 39.9 | 226.4 | 3.8 | 12.3 | 220.9 |
| EBITDA | 1.4 | 6.6 | 9.3 | 42.3 | 573.3 | 1.7 | 15.9 | 833.0 |
| Dep. & amortisation | (2.1) | (2.8) | (2.7) | (1.3) | 27.7 | (4.3) | (5.5) | 28.0 |
| EBIT | (0.7) | 3.8 | 6.6 | 74.0 | <(100.0) | (2.6) | 10.4 | <(100.0) |
| Net finance cost | 0.4 | (0.0) | (0.1) | 605.3 | <(100.0) | 0.4 | (0.2) | <(100.0) |
| EI | (0.1) | (0.2) | (2.3) | 808.4 | >100.0 | 0.0 | (2.5) | <(100.0) |
| PBT | (0.5) | 3.5 | 4.2 | 19.3 | <(100.0) | (2.2) | 7.7 | <(100.0) |
| Core PBT | (0.4) | 3.8 | 6.5 | 71.4 | <(100.0) | (2.2) | 10.2 | <(100.0) |
| Tax | 0.1 | (0.8) | (1.0) | 19.4 | <(100.0) | 0.5 | (1.9) | <(100.0) |
| PAT | (0.4) | 2.7 | 3.2 | 19.3 | <(100.0) | (1.7) | 5.9 | <(100.0) |
| Core PAT | (0.3) | 2.9 | 4.9 | 71.3 | <(100.0) | (1.7) | 7.8 | <(100.0) |
| Core EPS (sen) | (0.1) | 0.6 | 1.0 | 71.3 | <(100.0) | (0.4) | 1.6 | <(100.0) |
| DPS (sen) | 0.0 | 0.0 | 0.0 | na | na | 0.0 | 0.0 | na |
Profitability ratio
| p.p. | p.p. | p.p. | ||||||
|---|---|---|---|---|---|---|---|---|
| EBITDA margin (%) | 6.4 | 18.3 | 22.0 | 3.7 | 15.6 | 4.1 | 20.3 | 16.2 |
| Core PBT margin (%) | (1.8) | 10.5 | 15.2 | 4.7 | 17.1 | (5.3) | 13.1 | 18.4 |
| Tax rate (%) | 20.1 | 24.0 | 24.0 | 0.0 | 3.9 | 21.4 | 24.0 | 2.6 |
| Core PAT margin (%) | (1.5) | 8.0 | 11.6 | 3.6 | 13.1 | (4.2) | 9.9 | 14.1 |
Sector Recommendation Guideline
OVERWEIGHT: The total return of the sector, as per our coverage universe, exceeds 12%.
NEUTRAL: The total return of the sector, as per our coverage universe, is within the range of 7% to 12%.
UNDERWEIGHT: The total return of the sector, as per our coverage universe, is lower than 7%.
Stock Recommendation Guideline
| BUY | : | Total return of the stock exceeds 12%. |
| HOLD | : | Total return of the stock is within the range of 7% to 12%. |
| SELL | : | Total return of the stock is lower than 7%. |
| Not Rated: | The company is not under coverage. The report is for information only. |
Total Return of the stock includes expected share price appreciation, adjustment for ESG rating and gross dividend. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting.
Total Return of the sector is market capitalisation weighted average of total return of the stocks in the sector.
ESG Scoring & Guideline
| Scoring | Environmental | Social | Governance | Average |
|---|---|---|---|---|
| ★★ | ★★★ | ★★★ | ★★★ | |
| Remark | Coraza seeks to minimise environmental pollution via compliance with the Environment Quality (Scheduled Wastes Regulations 2005) for waste disposal and employing additional measures via monthly tests on wastewater effluents. | Coraza emphasises on employee safety and health. It is also committed through various CSR initiatives. | Coraza has reasonable oversight in place, supported by established Code of Conduct and Ethics Policy, Anti-Bribery and Anti-Corruption Policy, and Whistle-blower Policy. | |
| ★★★★★ (≥80%): | Displayed market leading capabilities in integrating ESG factors in all aspects of operations, management and future directions. | +5% premium to target price | ||
| ★★★★ (60-79%): | Above adequate integration of ESG factors into most aspects of operations, management and future directions. | +3% premium to target price | ||
| ★★★ (40-59%): | Adequate integration of ESG factors into operations, management and future directions. | No changes to target price | ||
| ★★ (20-39%): | Have some integration of ESG factors in operations and management but are insufficient. | -3% discount to target price | ||
| ★ (<20%): | Minimal or no integration of ESG factors in operations and management. | -5% discount to target price | ||
Disclaimer
The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein.
As of Friday, August 22, 2025, the analyst, Chan Mun Chun, who prepared this report, has interest in the following securities covered in this report:
(a) nil
