This Contractor Has Record S$798m Order Book, 30+% Margin, S$172m Net Cash

• OKP Holdings, a civil-engineering group, has a record S$797.9m orderbook, which has grown for five consecutive years.

• Post-1H results, Evolve raised its forecast of group gross margin for FY26 from 32.1% to 35.5%. 

It explicitly identified a structural reason why OKP earns better margins: cycling-path work involves unusually difficult coordination across NParks, MCSTs, PUB, LTA, URA and other stakeholders.

Evolve says a listed industry peer independently described these projects as difficult to execute, supporting the view that OKP's experience is a genuine barrier to entry.

•  Then there is the large and growing cashpilerelative to the current S$376m market cap (stock price: 70 cents). Evolve expects net cash to approach 36 cents per share. That translates to a 3.5× ex-net-cash P/E for FY26 (based on Evolve's EPS forecast).

In a similar vein, earlier analyst reports from Lim & Tan Securities and Tickrs portrayed the stock as a deep-value infrastructure play. Their target prices:

•  Evolve forecasts S$52.9m PATMI, S$60.4m operating cash flow, around S$191m FY26 net cash and an entrenched niche with genuine barriers to entry.

Yet, Evolve cut its valuation of the business from 6× EBITDA to 5.5x because the construction sector has derated but retained its target price of 98 cents.

• Read excerpts of its report below .....

 1H26 Earnings Update

• We maintain our BUY on OKP with a TP of S$0.98/share, based on 5.5x FY26E EV/EBITDA. 

We trim our target multiple to reflect the de-rating across the construction sector since our initiation, where the sharpest declines in share price have come from its core peers.

However, we view the de-rating as overdone in OKP's case.

We continue to view OKP as one of the best amongst its peer set, with high margins driven by its dominant presence in LTA-driven cycling-path and commuter-infrastructure work, alongside the highest order book cover and strongest balance sheet amongst peers.

• OKP's leadership in cycling-path infrastructure remains a genuine barrier to entry.

In recent industry conversations, a listed civil-contracting peer described cycling-path works as difficult to execute, requiring the tenderer to clear and coordinate across multiple agencies.