Oiltek International
Company Description
Oiltek International provides renewable energy equipment.
Stock Data
- GICS Sector: Industrials
- Bloomberg Ticker: OTEK SP
- Shares Issued: 143.0M
- Market Cap: S$164.5M (~US$121.5M)
- 3-Month Avg. Daily Turnover: US$0.2M
Price Performance (%):
- 52-Week High/Low: S$1.24/S$0.23
- Performance:
- 1 Month: +10.6%
- 3 Months: +57.5%
- 6 Months: +147.3%
- 1 Year: +379.2%
- Year-To-Date (YTD): +10.6%
Major Shareholders:
- Koh Brothers Group: 68.1%
- Yong Khai Weng: 6.43%
Financial Performance (2024 Highlights)
- Revenue: RM230M (+15% YoY)
- Net Profit: RM30M (+55% YoY) – 12-14% above consensus estimates
- Gross Margin: 23.9% (+4.4ppt YoY)
- Net Margin: 12.9% (+3.4ppt YoY)
Revenue by Segment:
- Edible & Non-Edible Oil Refinery: RM193.9M (+23% YoY)
- Renewable Energy: RM17.6M (-30% YoY)
- Product Sales & Trading: RM18.8M (+0.9% YoY)
Earnings Performance & Forecast
- Earnings exceeded expectations due to higher margins in the edible & non-edible oil refinery segment and higher-than-expected interest income.
- Proposed Dividend: 1.8 S cents per share (total DPS: 2.7 S cents, 44.4% payout ratio).
Orderbook & Future Outlook
- New Orders Secured in 2024: RM207M
- Current Orderbook: RM355M (as of Feb 12, 2025)
- Expected Order Fulfillment: Next 18-24 months
Market Outlook & Growth Catalysts:
- Strong demand for vegetable oils & biodiesel
- The global fats & oils market is projected to grow from US$257B (2023) to US$403B (2033).
- Increasing demand for vegetable oils (palm oil, soybean oil, rapeseed oil) benefits Oiltek.
- Higher biodiesel blending requirements (Malaysia B10 → B20; Indonesia B35 → B40) boost demand.
- Sustainable Aviation Fuel (SAF) Potential
- Aviation industry targets net-zero CO2 emissions by 2050.
- SAF production (derived from hydro-treated vegetable oil – HVO) is expected to play a major role.
- Oiltek provides solutions for processing vegetable oil-based raw materials into HVO feedstock.
Valuation & Recommendation
- Rating: BUY (Maintained)
- New Target Price: S$1.37 (up from S$1.22)
- Valuation Basis:
- 19x 2025F PE
- Pegged to 0.9x PEG (10% discount applied)
- Key Catalysts for Share Price Upside:
- Higher-than-expected order wins
- Better-than-expected margins due to economies of scale
This report confirms Oiltek International’s strong financial performance in 2024 and its positive growth trajectory, supported by its expanding orderbook and favorable industry trends in edible oils, biodiesel, and SAF.
Thank you
