Oppstar Berhad’s Q1 FY2026: Navigating a Mixed Landscape with Strategic Focus
Greetings, fellow investors and market watchers! Today, we’re diving into the latest financial performance of Oppstar Berhad for their first quarter ended 30 June 2025. This report offers a crucial glimpse into how one of Malaysia’s homegrown semiconductor players is performing amidst dynamic global market conditions. While the quarter presented some notable challenges, leading to a shift from profit to loss compared to the same period last year, there are also encouraging signs of strategic agility and sequential improvement.
Let’s dissect the numbers to understand the key drivers behind Oppstar’s recent performance and what they signal for the future. Prepare for a detailed breakdown, as we explore both the headwinds and the strategic maneuvers Oppstar is employing to chart its course ahead.
Financial Overview: A Tale of Two Quarters
Oppstar Berhad’s first quarter for the financial year ending 31 March 2026 (Q1 FY2026) saw a significant recalibration of its financial standing when compared to the corresponding period last year. Here’s a quick glance at the core figures (all figures in RM’000 unless otherwise stated):
| Unaudited 30.06.2025 (RM’000) | Unaudited 30.06.2024 (RM’000) | Change (RM’000) | Percentage Change | |
|---|---|---|---|---|
| Revenue | 7,957 | 13,462 | (5,505) | (40.89%) |
| Gross (Loss)/Profit | (1,781) | 4,016 | (5,797) | N/A (swing to loss) |
| (Loss)/Profit Before Tax | (3,927) | 2,861 | (6,788) | N/A (swing to loss) |
| (Loss)/Profit for the financial period | (4,022) | 2,104 | (6,126) | N/A (swing to loss) |
| Basic (Loss)/Earnings per Share (sen) | (0.63) | 0.33 | (0.96) | N/A (swing to loss) |
It’s evident that the latest quarter marked a challenging period for Oppstar, shifting from a profitable position to a loss-making one when benchmarked against the same quarter in the previous year. However, a deeper dive reveals a more nuanced picture.
Revenue Trends: A Closer Look
Oppstar’s revenue for Q1 FY2026 saw a notable decline when compared to the corresponding quarter of the preceding year, but demonstrated a healthy sequential recovery from the immediate preceding quarter.
Current Quarter (30 June 2025)
Revenue: RM7,957,000
Corresponding Quarter (30 June 2024)
Revenue: RM13,462,000
The decrease in revenue by approximately RM5.51 million, or 40.89%, from the corresponding quarter of the preceding year was primarily due to a significant reduction in turnkey design services and specific design services. These segments saw declines of approximately RM5.38 million (81.69%) and RM1.27 million (18.85%), respectively. This was partially mitigated by an increase of approximately RM1.15 million in revenue from post-silicon validation services, highlighting a shift in service contribution.
On a more positive note, comparing the current quarter to the immediate preceding quarter (Q4 FY2025), revenue increased by approximately RM1.66 million, or 26.38%, rising from RM6.30 million to RM7.96 million. This improvement was driven by higher contributions from turnkey design services (up RM1.09 million) and post-silicon validation services (up RM0.80 million), signaling a rebound in these areas, despite a marginal decrease in specific design services.
Profitability: Navigating Challenges
The decline in revenue, particularly from higher-margin turnkey projects, significantly impacted profitability. Oppstar recorded a Gross Loss in the current quarter, a stark contrast to the Gross Profit achieved a year ago.
Current Quarter (30 June 2025)
Gross (Loss): (RM1,781,000)
Loss Before Tax: (RM3,927,000)
Corresponding Quarter (30 June 2024)
Gross Profit: RM4,016,000
Profit Before Tax: RM2,861,000
The Group registered a Gross Loss of approximately RM1.78 million in the current quarter, compared to a Gross Profit of RM4.02 million in the corresponding quarter last year. This reversal was mainly attributed to lower contributions from turnkey projects and higher labour costs, as the engineer headcount increased from 263 to 287.
Consequently, Oppstar moved from a Profit Before Tax (PBT) of RM2.86 million to a Loss Before Tax (LBT) of approximately RM3.93 million. This loss was further exacerbated by an increase in other operating expenses by RM0.33 million, primarily due to a net foreign exchange loss of RM0.25 million and a reversal of a fair value gain on other investments amounting to RM0.06 million.
However, when compared to the immediate preceding quarter, the Gross Loss narrowed from RM2.54 million to RM1.78 million, and the LBT significantly improved by approximately RM2.81 million, or 41.72%, from RM6.74 million to RM3.93 million. This positive sequential improvement was largely due to the absence of impairment on trade receivables following successful collections and a reduction in foreign exchange losses by approximately RM0.88 million.
Earnings Per Share: The Bottom Line
Current Quarter (30 June 2025)
Basic Loss Per Share: (0.63 sen)
Diluted Loss Per Share: (0.62 sen)
Corresponding Quarter (30 June 2024)
Basic Earnings Per Share: 0.33 sen
Diluted Earnings Per Share: 0.32 sen
Reflecting the overall shift to a net loss for the period, the Group recorded a Basic Loss Per Share of 0.63 sen and a Diluted Loss Per Share of 0.62 sen, a decline from the positive earnings per share reported in the same quarter last year.
Segmental Performance: What Drove the Numbers?
Oppstar operates primarily in the IC design and post-silicon validation services segment. While this segment accounted for all external revenue in Q1 FY2026, the internal dynamics reveal the specific challenges faced:
- Turnkey Design Services: Experienced a significant reduction, contributing largely to the overall revenue decline compared to the previous year. These projects typically have longer sales cycles and larger commitments.
- Specific Design Services: Also saw a decrease year-on-year, though less severe than turnkey projects.
- Post-Silicon Validation Services: Demonstrated resilience and growth, increasing by RM1.15 million compared to the prior year’s corresponding quarter. This segment is clearly gaining traction.
The decrease in revenue from turnkey projects, which are generally higher-margin, combined with increased labour costs due to a larger engineer headcount (287 vs. 263 last year), pressured the Group’s gross margins and ultimately led to a gross loss.
Financial Health Check: Balance Sheet and Cash Flow
As at 30 June 2025, Oppstar’s total assets stood at RM136.13 million, a slight decrease from RM140.45 million as at 31 March 2025. Total equity also saw a minor reduction from RM135.65 million to RM131.74 million. Net assets per share remained stable at 0.21 sen.
As at 30 June 2025
Total Assets: RM136,131,000
Cash & Bank Balances: RM8,566,000
As at 31 March 2025
Total Assets: RM140,449,000
Cash & Bank Balances: RM5,401,000
Despite the overall asset reduction, cash and bank balances increased to RM8.57 million from RM5.40 million. However, short-term funds decreased from RM68.56 million to RM64.20 million. From a cash flow perspective, the Group recorded net cash used in operating activities of RM463,000 for the quarter, reflecting the challenging operational environment. Overall, there was a net decrease in cash and cash equivalents of RM1.19 million for the period.
Navigating the Future: Risks and Opportunities
Oppstar Berhad’s Board anticipates a “mixed-to-cautious outlook” for the coming quarters. This perspective is shaped by a blend of ongoing global uncertainties and emerging domestic opportunities within the semiconductor ecosystem.
Key Market Headwinds
- Global Macroeconomic Headwinds: Lingering subdued demand in the consumer electronics sector and delayed capital spending decisions continue to impact the industry.
- Geopolitical Tensions: The potential reimplementation of certain trade measures could further weigh on market sentiment and operational flexibility.
- Talent Competition: The perennial challenge of finding and retaining skilled engineers persists, with demand often outstripping supply.
Strategic Resilience and Growth Drivers
- Malaysia’s Strategic Positioning: As a neutral and trusted jurisdiction in the global semiconductor value chain, Malaysia offers long-term strategic opportunities for local companies like Oppstar.
- Resilience in Specific Design Services: This segment continues to show consistent customer engagement and demand, being more sustainable and recurring in nature, making it a key focus area.
- Strategic IP Development: Oppstar is exploring partnerships for proprietary Intellectual Property (IP) development, aiming to enhance technical capabilities and create future licensing opportunities, thus strengthening its position in the chip design ecosystem.
- Growing Post-Silicon Validation: This service continues to gain traction due to the increasing complexity of semiconductor designs and the need for robust validation. It has shown consistent quarter-on-quarter growth and is expected to be a meaningful revenue contributor.
- Turnkey Project Engagement: Despite slower conversion in recent quarters, the Group is actively engaging with potential customers and aims to secure “at least a handful” of turnkey projects in the coming financial year, adopting a selective approach based on technical capability and margin expectations.
To address challenges and seize opportunities, Oppstar will maintain its focus on operational discipline, capability enhancement, and strategic collaboration. Efforts to combat talent competition include graduate hiring, upskilling programmes, and regional sourcing strategies. The Group is also actively exploring collaborative opportunities in emerging semiconductor initiatives to strengthen its overall value chain positioning.
Summary and Investment Recommendations
Oppstar Berhad’s first quarter for FY2026 presents a mixed bag of results. While the decline in revenue and a shift to a loss-making position compared to the previous year’s corresponding quarter are clear concerns, the sequential improvements from the immediate preceding quarter offer a glimmer of optimism. The company is actively navigating a challenging global semiconductor landscape, characterized by demand slowdowns and geopolitical uncertainties, while simultaneously investing in strategic initiatives and focusing on resilient segments.
Key takeaways from this report include:
- Significant year-on-year revenue contraction, primarily due to reduced turnkey and specific design services.
- A shift from gross profit to gross loss, further impacted by increased labour costs and other operating expenses.
- Encouraging sequential improvement in revenue and a substantial narrowing of losses compared to the immediate preceding quarter.
- Strong performance and growing traction in post-silicon validation services.
- Strategic focus on IP development, talent management, and targeted engagement for high-value projects to drive future growth.
The path ahead will require Oppstar to effectively execute its strategies, particularly in securing new turnkey projects and expanding its post-silicon validation footprint, against a backdrop of competitive talent markets and global economic fluctuations. Their commitment to capability enhancement and strategic partnerships will be crucial in building a foundation for long-term growth.
Disclaimer: Please note that this blog post provides an analysis of Oppstar Berhad’s quarterly report and should not be construed as investment advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions.
What are your thoughts on Oppstar Berhad’s latest quarterly performance? Do you believe their strategic focus on IP development and post-silicon validation will be enough to counter the current market headwinds and secure their growth trajectory in the coming years? Share your insights and perspectives in the comments section below!
For more detailed analysis on Malaysian semiconductor firms and industry trends, be sure to check out our other recent articles:
- Exploring the Latest Trends in the Global Semiconductor Industry
- Understanding the Impact of Geopolitics on Tech Stocks in ASEAN
