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$CORAZA / 0240 (CORAZA INTEGRATED TECHNOLOGY BERHAD)

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Good morning 🌻

*CORAZA (Maintain BUY, TP at RM0.60 based on 25x 2025 PE)*

• *Above expectations, turning the corner after four quarterly losses.* Coraza Integrated Technology (Coraza) delivered a remarkable pre-tax profit of RM3.0m in 4Q24 (+17x qoq, +3x yoy), reversing its 9M24 pre-tax losses of RM2.0 to pre-tax profit of RM1m in 2024.

• This was mainly driven by continuous improvement in top-line performance alongside better operational efficiency, which led to its optimal performance at the operational level.

• *In terms of top-line improvement,* the recovery was driven by a rebound in demand from semiconductor customers and phasing in / conversion of new project introduction (NPI), marking a key step forward in Coraza's journey toward sustained profitability.

• *Yoy, 2024 revenue returned to a positive growth trajectory of 35%,* rebounding from a 16% decline in 1H24. This was driven by a stronger order ramp-up amid the semiconductor industry’s recovery and additional contributions from NPI.

• Excluding provision of inventories write-off and unrealised forex portion, the group achieved an adjusted profit before tax (PBT) of RM3.9m, supported by improved operational efficiency.

• *Qoq, revenue improved by 12%* fuelled by the semiconductor industry’s gradual recovery. As a result of better operational efficiency, the group recorded core PBT of RM4.0m.

• *Seeing light at the end of tunnel.* Coraza’s order on hand remains steady compared with the preceding quarter, with around 50% of the total orders coming from the semiconductor industry while 32% are coming from instrumentation. Meanwhile, the increasingly higher NPI activities in the past few quarters have started contributing positively to total orders and revenue.

• *Consistent sequential revenue improvements* over the past four quarters indicate that the group’s recovery is on track. The current outstanding orderbook stands at RM70m, which is >10% higher than the last quarter’s quantum.

• After model updates, we increased our 2025/26 earnings by 23-25% respectively to account for higher sales and margins assumptions.

• *Maintain BUY and a higher target price of RM0.60* (from RM0.48), still based on 25x 2025F PE.

Thanks.