OKP Pros and Cons Analysis

OKP Pros and Cons Analysis

Road work

Pros

  • Acceptable moat – only listed road specialist, many years of experience and track record
  • Strong financials, FCF, ROE, margins
  • Good dividend yield
  • Even though undertaking mostly government projects, margins are high – shows management competence
  • China Sonangol catalyst (construction of condos, overseas opportunities, can be acquisition target)
  • Oil and gas industry catalyst
  • Property development catalyst
  • Overseas JV opportunities -$6.75 mil set aside for overseas business expansion
  • Won huge project for CTE widening from LTA – shows competency and trustworthiness of the company
  • Can acquire other smaller companies with cash hoard
  • MRT contract catalyst
  • Lots of awards won and in August 2010,  OKP made it to the Forbes Asia’s ‘Best Under A Billion’ List
  • Highest order book in company history till 2014 and winning lots of contracts of late
  • Construction expenditure by government usually increases during downturn
  • Or …
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