• UOB Kay Hian's alpha picks portfolio comprises small-mid caps. It has done well although for 1Q25 it underperformed the STI by 5.1ppt on an equal weighted basis, due largely to the strong gains by the banking sector which is represented in the STI. • Some stocks in the portfolio have been crushing it—Centurion is up a whopping 26.3% in just a month, China Sunsine climbed 14.7%, and UMS Integration rose 8.8%. • Oiltek International has just been added to the portfolio (see below). Its inclusion, despite a jaw-dropping 1-year return of 363%, is remarkable and the broker has a high target for it. ![]() • Oiltek (market cap: S$169 million) operates out of Malaysia a business that is pretty technical.
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Excerpts from UOB KH report
ACTION
•Rejigging our portfolio. We add Oiltek due to its upcoming transfer to the SGX mainboard and new recurring revenue from its new partnership with Pertamina and also add Valuetronics for its new customer contributions and potentially better-than-expected results.
We also add DFI Retail on the back of the recent sale of its Singapore food business to concentrate on its higher-margin business segments.
We take profit on ComfortDelGro, Centurion and UMS integration as they have done well since their addition to our Alpha Picks portfolio, and remove Riverstone from our portfolio as we see a lack of near-term share price catalysts.
Oiltek International - Buy |
Analysts: John Cheong & Heidi Mo
• Transfer of listing to SGX mainboard to enhance image and provide a wider platform of potential investors.
Oiltek International (Oiltek) on 17 Feb 25 announced that it has submitted an application to the SGX to transfer its listing from the Catalist Board of the SGX-ST to the Mainboard of the SGX-ST. |
John Cheong, analyst • Proposed 2-for-1 bonus shares issue to enhance trading liquidity. On 3 Mar 25, Oiltek proposed a bonus issue of two bonus shares for every one existing share, which will increase the number of shares from 143m to 429m shares.
This could improve the accessibility of investing in Oiltek to more investors, thereby encouraging trading liquidity and greater participation by investors and broadening the shareholder base.
Both the transfer of listing and bonus issue will be tabled for approval in AGM on 25 Apr 25.
• Partnership with Pertamina enables Oiltek to enter into a new business model with recurring revenue. On 26 Feb 25, Oiltek announced a head of agreement with Pertamina develop a Pre-Treatment Unit (PTU) and supply feedstock for the PTU.
This partnership aims to explore alternative feedstocks to replace crude palm oil for sustainable aviation fuel (SAF) and hydrotreated vegetable oils (HVO).
We think that this provides Oiltek with:
a) construction revenue in the initial stage; b) ownership of a substantial stake in the completed plant; and c) feedstock supply revenue of the PTU. |
We expect construction revenue to begin in 2026, with the plant contributing from 2027 onwards.
We have not incorporated these additional earnings into our forecasts as we await further details from the upcoming partnership agreement.
• Orderbook remains near record high. Oiltek secured RM207m in new orders in 2024, bringing its orderbook to RM355m as of 12 Feb 25 (vs RM361m as of 7 Feb 24).
This is expected to be fulfilled in the next 18 to 24 months.
• Maintain BUY with a target price of S$1.44, based on 20x 2025F PE, pegged to 0.8x PEG. We have ascribed a 20% discount to 1.0x PEG. • Events:
• Timeline: 6-12 months. |
Full report here.
See also: OILTEK: Technical Business Became a Market Darling with a 390% stock surge in 1 year