OKA

OKA

Postby winston » Tue Sep 03, 2019 9:01 am

not vested

Trading Buy: OKA-7140
Better times ahead
(Last price: RM0.600, Potential upside +23.3%)

Company Profile

OKA (listed in June 2002) is the one of the leading integrated manufacturer of precast concrete products in Malaysia

Trading Catalyst

As OKA is one of the largest local ready-mixed and precast concrete manufacturers and its products are widely used in the infrastructure, sewerage, construction and highways, sentiment on the stock could further improved in anticipation of the revival of mega infrastructure projects and government’s commitment in building more affordable homes.

Valuations are cheap at 11.7x (53% below peers) and 0.83x BVPS (43% below peers), underpinned by attractive 6.2% DY (based on average 3.7sen in the last 3 years) and 1Q20 net cash/share of RM0.192 (Ex-cash P/E is only 7.9x).

Technically, the stock is poised for a potential downtrend reversal towards RM0.63-0.74 levels in the mid to long term following the formation of Dragon Fly Doji and Hammer candlesticks.

Technical View
Resistance: RM0.630 / RM0.670 / RM0.740
Support: RM0.585 / RM0.555
Cut loss: RM0.550

Key Financial Stats
Trading at 11.7x trailing P/E (-53% below peers) and 0.83x P/B (-43% below peers), backed by 6% DY and 19.2sen net cash.

Source: Bloomberg, HLIB
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston
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Re: OKA

Postby winston » Sun Jan 05, 2020 9:48 am

not vested

Stock Picks: Oka Corp Bhd
Price: 74 sen

We see upside potential for the shares of this building-materials company, supported by several catalysts.

Firstly, the group is envisaged to benefit from the improving outlook of the construction prospects, following the revival of several mega infrastructure and property projects such as the Light Rail Transit 3, Klang Valley Double Track Phase 2, East Coast Rail Link, Bandar Malaysia, and KL-Singapore high-speed rail.

As a leading precast concrete manufacturer, with a proven track record of supplying building materials to mega projects in the country, we believe Oka group could clinch sizeable orders in the near future.

Secondly, we believe worst is over for the group. After a dismal showing for the financial year (FY) ended March 30,2019, where Oka’s net profit fell 55% to RM11mil from RM24.6mil in the preceding year, Oka could see its bottom line improve for FY2020.

This is evidenced by its earnings recovery, with a net profit of RM7.8mil for the first half of FY2020.

We expect Oka to post earnings of RM15mil for FY2020, which represents an annual growth of 36.4%. Its net earnings could further strengthen to RM21mil for FY2021.

In addition, its decent dividend yield of around 5% for FY2020 (assuming a dividend per share of 3.7 sen as per last financial year and based on current share price) should lend support for the stock.

Our fair value for Oka’s shares is 86 sen, which represents 10 times its estimated PE for FY2021.

Source: JF Apex Securities
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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