• OKP Holdings, a civil-engineering group, is increasingly focused on cycling paths, covered linkways, footpaths and accessibility upgrades, with the Land Transport Authority as its dominant customer. Its A1 civil-engineering status allows it to tender for public projects of unlimited value, while maintenance work provides a recurring second earnings stream. • Earlier analyst reports from Lim & Tan Securities and Tickrs portrayed the stock as a deep-value infrastructure play. OKP has a cash-rich balance sheet, strong returns and record order book. • Now Evolve Capital has initiated coverage with a BUY call and S$0.98 target price.
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Excerpts from Evolve Capital report
Analyst: Ethan Aw
Investment Highlights
While the firm has already rerated in comparison to its civil engineering construction peers, we believe that the existing premium is justified given that: (i) OKP has the highest order book cover among its core peers at 3.4x (vs. 1.8-2.4x);(ii) a dominant presence in LTA cycling-path infrastructure, (iii) one of the strongest balance sheets, and highest margins amongst its core and broader construction peers. |
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• However, against the broader, larger and more liquid construction names, OKP remains one of the cheapest in terms of valuation, despite its large order book and strong net cash position.
Hence, we expect OKP to rerate upwards towards the broader construction peer average on improved visibility and continued earnings growth.
| • A policy tailwind in OKP’s specialty |
As Singapore's construction sector is underpinned by a substantial public-sector order pipeline, BCA's 2026 projections put total construction demand at S$47S$53bn in 2026, similar to 2025.
More specifically, a sizeable amount of spending is directed at rail-adjacent connectivity, covered linkways, footpaths, cycling paths and POB accessibility upgrades.
In our view, this is a more durable driver than headline construction demand because it is tied to a multi-year national active-mobility and accessibility programme rather than to the broader building cycle.
• OKP’s order book currently at a record high. As of 28th May 26, its net order book stood at S$760.7m, with projects extending to 2031, which stands at around 3.4x FY25 revenue.
We estimate that the firm has around 8 ongoing construction projects as at the time of writing, as it is likely to have completed some of its older projects. Notably, its net order book has been on a strong upwards trajectory, surpassing even pre-COVID levels.
Revenue has risen from S$69.6m in FY20 to S$223.5m in FY25, representing a CAGR of 26.3%. Construction has been its primary driver, having grown by 3.4x to S$154.4m over the same period while Maintenance had grown by 3.8x. |
→ See also:OKP: Isn't This What Deep Value Looks Like: ~5x Ex-Cash P/E, $135M Cash Hoard, Record Order Book?
