[%XLlR%] 
Research by HLIB
BUY – TP RM2.47

" Acquisition to double cable capacity”

OSK’s 97.47%-owned subsidiary, Olympic Cable, is acquiring Universal Cable's assets, including two manufacturing facilities producing low, medium, and high-voltage cables for RM85m. We view this acquisition positively given (i) the attractive acquisition price at 41.8% discount to book value, (ii) entry into the growing high voltage cable segment, (iii) enhanced cost efficiencies through economies of scale, and (iv) a faster time to market compared to building a new facility. Additionally, this expansion is timely given the growing demand for cables driven by solar projects, data centres, and grid expansion initiatives. This expansion could potentially double the cable segment current capacity. Our forecasts remain unchanged pending acquisition completion. Maintain BUY with TP of RM2.47 based on 25% discount to our SOP-derived value of RM3.30.

Analyst: 
Tan Kai Shuen, CFA
[%SMXq%]

$KLSE-OSK 
Research by HLIB
BUY – TP RM2.47

" Acquisition to double cable capacity”

OSK’s 97.47%-owned subsidiary, Olympic Cable, is acquiring Universal Cable's assets, including two manufacturing facilities producing low, medium, and high-voltage cables for RM85m. We view this acquisition positively given (i) the attractive acquisition price at 41.8% discount to book value, (ii) entry into the growing high voltage cable segment, (iii) enhanced cost efficiencies through economies of scale, and (iv) a faster time to market compared to building a new facility. Additionally, this expansion is timely given the growing demand for cables driven by solar projects, data centres, and grid expansion initiatives. This expansion could potentially double the cable segment current capacity. Our forecasts remain unchanged pending acquisition completion. Maintain BUY with TP of RM2.47 based on 25% discount to our SOP-derived value of RM3.30.

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