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Research by HLIB
Buy (Maintain) – TP RM2.16

“Setting sail for a stronger FY24"

OSK’s FY23 results saw record-high revenue and strong earnings growth of +10.2% YoY, driven by robust performance in capital financing and industries. Growth prospects remain promising for the group in FY24. For property development, the group is scaling up launches in Malaysia and actively looking for new landbanks. Capital financing should see strong growth from its growing civil servant and Australia segments. Cables should see stable demand while IBS is poised for strong growth given the recovering property demand and increasing IBS adoption among contractors. We revise upwards FY24/25 forecasts by +2.1%/3.6% to account for higher contribution from capital financing. Maintain BUY with higher TP of RM2.16 (from RM2.04) based on 30% discount to SOP-derived value of RM3.06 as we rollover our valuation base year.

Analyst:
Tan Kai Shuen, CFA
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$KLSE-OSK
Research by HLIB
Buy (Maintain) – TP RM2.16

“Setting sail for a stronger FY24"

OSK’s FY23 results saw record-high revenue and strong earnings growth of +10.2% YoY, driven by robust performance in capital financing and industries. Growth prospects remain promising for the group in FY24. For property development, the group is scaling up launches in Malaysia and actively looking for new landbanks. Capital financing should see strong growth from its growing civil servant and Australia segments. Cables should see stable demand while IBS is poised for strong growth given the recovering property demand and increasing IBS adoption among contractors. We revise upwards FY24/25 forecasts by +2.1%/3.6% to account for higher contribution from capital financing. Maintain BUY with higher TP of RM2.16 (from RM2.04) based on 30% discount to SOP-derived value of RM3.06 as we rollover our valuation base year.

Analyst:
Tan Kai Shuen, CFA
kstan@hlib.hongleong.com.my