OKP

[winston]

From CIMB:-

Project delays

We visited OKP last week for a business update, and understand that the company has an outstanding order book of about S$134m, of which 60-70% should be delivered in FY08. However, the company is experiencing delays in the award of tenders by customers, especially from the oil & gas industries.

There were also some delays in starting work for public-sector contracts already awarded. As such, we are cutting our FY08-10 earnings forecasts by 25-32%, ahead of its 1Q08 results on 12 May, to better reflect the company’s slowing construction activities in the near term.

Delays in tender awards.
Optimism stimulated by the construction boom that began in 2006 appears to be waning. Our industry checks suggest that tender awards are being delayed, and even if contracts have been awarded, actual construction may now be deferred by a few months.

Accordingly, OKP has been experiencing uncharacteristic delays for its tenders, some of which were submitted over six months ago. We understand that these were mainly tenders from oil & gas customers, which were predominantly behind OKP’s growth in FY07.

A weaker residential property market, credit tightening and higher construction costs likely prompted this industry slowdown. With the exception of public-sector contracts which are continually being awarded, we believe that the slowdown may be in its early stages.

As such, OKP’s revenue profile could revert to a 50:50 split between private and public-sector projects in FY08, vs. 70% from the private sector in FY07.

Hedging raw-material requirements.
Rising steel prices are the latest bugbear of the construction industry, as suppliers are no longer allowing long-term contracts at fixed prices. Instead, steel suppliers (including steel mills) are shortening their supply contracts to six months to two years. Thus, for main contractors with large order books stretching 2-3 years, there is a strong risk of a margin squeeze from unhedged steel requirements.

For public-sector projects, the standard 90-day tender period exposes bidding contractors to volatility in raw material prices.

Valuation and recommendation
Maintain Outperform, albeit with lower target price of S$0.69 (from S$0.91). We have reduced our FY08-10 earnings forecasts by 25-32% to reflect some tender delays and fewer contract wins from the oil & gas sector, as well as some margin pressure from higher staff and diesel costs.

Our target price accordingly falls to S$0.69 from S$0.91, still based on 8x CY09 P/E, or at a 20% discount to the target P/E for its peers. Nevertheless, OKP still has a decent order book of S$134m while it intends to fall back on the public sector in the near term. Maintain Outperform.

[millionairemind]

February 3, 2009, 6.18 pm (Singapore time)

OKP wins S$119.3 mln deal to widen part of CTE
By KALPANA RASHIWALA


OKP Holdings Limited's fully-owned unit Or Kim Peow Contractors (Pte) Ltd has clinched a S$119.27 million contract from Singapore's Land Transport Authority to widen part of a major expressway.

The contract to widen the stretch of the Central Expressway from Pan Island Expressway to Braddell Interchange is expected to be completed on Dec 29, 2011, OKP said in a statutory filing to the Singapore Exchange on Tuesday.

'The contract is expected to contribute positively to, but has no material impact on, the earnings per share or net tangible assets per share of the company and its subsidiaries for the current financial year ending Dec 31, 2009,' OKP added.

The award also marks the biggest public-sector project OKP has secured has clinched in its 43 years of operations.

[kennynah]

i thot you started an OKT thread...

[millionairemind]

October 26, 2009, 6.16 pm (Singapore time)

OKP's Q3 net profit surges 87.6% on construction

By ANGELA TAN

Infrastructure and civil engineering company OKP Holdings Ltd on Monday reported net profit for the third quarter to end September 2009 rose 87.6 per cent to S$4.01 million.

The higher earnings were underpinned by the revenue which grew 50.8 per cent to S$35.12 million.

[winston]

Not vested. From DBS:-

PE 8; No EPS growth ?

All roads point north

• Key player in road works in Singapore, expanding into oil & gas projects and overseas ventures
• Net orderbook in excess of S$200m; we expect steady FY09-11 net profit CAGR of 12%
• Beneficiary of steady investments in public transport infrastructure projects in Singapore
• Net cash of S$0.33 per share and secure dividend yield of 6.3%; Initiate with BUY and TP of S$0.70

Record high orderbooks provide comfort. OKP is a civil works contractor focused on the road infrastructure market in Singapore and has the capability and expertise to carry out large infrastructure projects. About 20-25% of its revenues come from
fairly recurrent maintenance work, which provides a steady base load.

In recent years, OKP has also won higher-margin contracts from the oil & gas sector. The Group currently sits on a gross order book of cS$312m, of which more than S$200m is still outstanding and will be delivered over the next 12-18 months, providing good revenue visibility.

Multiple drivers for growth. Going forward, we expect further earnings growth from (1) civil engineering projects led by the Land Transport Authority (LTA)’s MRT projects for Downtown Line Stage 3 and major road projects yet to be tendered,
(2) more complex contracts from the oil and gas sector and
(3) overseas contracts via recent strategic alliance with energy and construction
conglomerate China Sonangol.

50% upside to target price of S$0.70. The Group’s strong cash balance of S$87m implies secure dividends as well, and frees up capital to take on larger, more complex projects, and allows leeway to invest in new businesses, possibility even small-scale
property developments.

Our target price for OKP is based on:-
1) 7xFY11 PE for its recurring business and
2) estimated S$0.22 per share surplus net cash.

This is derived after taking into account OKP’s conservative capital structure, which has resulted in the historical usage of about 17Scts per share to support a dollar of revenue. Initiate coverage with a BUY on OKP Holdings.

http://www.remisiers.org/cms_images/res ... y_DSBV.pdf

[memphisb]

Can we trade as fast as a report is issued?

15 % gain. spread is good.

[LenaHuat]

Won PUB contracts despite not being the lowest bid.

[winston]

Not vested. From DBS:-

30% upside to target price of S$0.70.

The Group’s strong cash balance of S$85m implies secure dividends as well, and frees up capital to take on larger, more complex projects, and allows leeway to invest in new businesses, possibility even small-scale property developments.

Our target price for OKP is based on
1) 7x FY11 PE for its recurring business and
2) estimated S$0.22 per share surplus net cash.

This is derived after taking into account OKP’s conservative capital structure, which has resulted in the historical usage of about 17Scts per share to support a dollar of revenue. Maintain BUY.

http://www.remisiers.org/cms_images/res ... l_DBSV.pdf

[LenaHuat]

OKP Holdings and Soilbuild Group Holdings have, through an equally owned joint-venture company, won an $83.5 million contract for the construction of a luxury condominium at Angullia Park in Orchard Road.

The development site formerly housed The Parisian condominium.

The contract for the joint-venture company, Forte Builder, was awarded by Angullia Development, a wholly owned subsidiary of China Sonangol Land (CS Land). CS Land is a related company of China Sonangol International Ltd, a conglomerate headquartered in Hong Kong.

The project is expected to commence this month with completion scheduled for April 2013. When completed, the new high-end development will comprise one block of a 36-storey residential flat development comprising a total of 54 units complete with various amenities.

[winston]

not vested

RESEARCH ALERT-OCBC starts OKP Holdings at buy

SINGAPORE, Sept 9 (Reuters) - OCBC Investment Research has initiated coverage of Singapore construction firm OKP Holdings at buy with a target price of S$0.65.

STATEMENT: OKP does infrastructure works for many government-related agencies in Singapore, such as the Land Transport Authority and the Public Utilities Board, and has a current order book of about S$370 million, which will stretch till the end of 2014, OCBC said.

The brokerage noted that OKP's healthy balance sheet will give it flexibility to pursue different avenues of growth, like property construction and even property development.

OKP also has strong operating and net margins compared to its peers, and trades at attractive valuations, OCBC added that it expects OKP to report earnings per share of S$0.093 in 2012 and S$0.095 in 2013.

At 0400 GMT, shares of OKP were 0.87 percent higher at S$0.58, and have gained 1.8 percent since the start of the year.

Source: Reuters