OKH Global Ltd. Annual Report 2024: Transition to Resilience and Profitability

1. Report Date and Financial Year

• The annual report is for the financial year ended 30 June 2024. The date of the report is 3 October 2024.

2. Company Performance and Financial Highlights

• Revenue: The company reported revenue of S$10.89 million in FY2024, a decline from S$14.53 million in FY2023. This decrease was mainly attributed to the end of the lease for one of the Group’s investment properties, The Herencia.
• Gross Profit: Gross profit dipped to S$8.68 million in FY2024, down from S$11.90 million in FY2023, with a slightly lower gross profit margin at 80.0% compared to 81.9% in the previous year.
• Net Profit: Despite lower revenue, the Group achieved a net profit of S$3.62 million in FY2024, an improvement from S$2.52 million in FY2023. This was driven by an increase in other income, including a fair value gain on investment properties and gains from the sale of some properties.
• Assets and Liabilities: As of 30 June 2024, the Group’s total assets stood at S$118.90 million with liabilities of S$59.62 million, resulting in a net asset value per ordinary share of approximately 5.25 cents.

3. Dividends

• The report does not mention any dividend distribution for the financial year ended 30 June 2024.

4. Key Points for Investor Actions

• The company is transitioning to a rental-centric business model focused on generating steady income, indicating a more low-risk approach to the real estate market.
• The management has taken actions to enhance financial stability, such as refinancing bank loans, repaying debts, and selling some investment properties.
• The company has achieved higher profitability through fair value gains on properties and reduced expenses due to lease completions, reflecting effective financial management.

5. Special Activities or Actions to Improve Profitability

• The company has shifted its business strategy to a rental-centric focus to improve operational resiliency.
• OKH Global sold some investment properties, which contributed to the positive financial performance in FY2024.
• Reduction in general and administrative expenses, especially with the end of The Herencia lease, indicates a focus on cost-efficiency.

6. Recommendations for Investors

• For Current Holders: Investors currently holding the stock may consider retaining their shares due to the company’s positive net profit, focus on rental income, and improving financial health. However, investors should closely monitor future revenue streams, given the end of certain leases affecting revenue.
• For Potential Investors: New investors might consider a cautious approach due to the recent decline in revenue and the company’s dependency on rental income. The focus on profitability and cost management is a positive indicator, but a detailed review of future earnings projections is advisable.
• Disclaimer: This recommendation is based solely on the information provided in the annual report and should not be construed as financial advice. Investors are encouraged to conduct their own research and consult financial professionals before making any investment decisions.

7. Special Considerations for Investors

• The company has proposed a renewal of the Share Purchase Mandate, which allows it to repurchase its shares, potentially indicating that the management believes the stock is undervalued.
• OKH Global’s commitment to sustainability, risk management, and corporate governance is notable, aligning with growing investor emphasis on ESG factors.