Lim & Tan Research has raised its target for OKP Holdings from S$1.03 to S$1.10, rolling valuation forward to FY27 at 11× P/E.
At S$0.68 share price, it estimates OKP trades at only 6.8× FY27 P/E and 2.6× ex-cash P/E. |
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The biggest new insights are:
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The order pipeline may be much longer than the market assumes.
Lim & Tan cross-references government expenditure lines relevant to OKP — cycling paths, commuter/road-related facilities, and road expansion — and estimates S$4.79bn of approved but not yet spent funding.
This is S$4.79bn of a wider pool of relevant government spending for which OKP can compete, with about S$658m earmarked for FY26.
At the current run-rate, it argues this implies roughly 6–7 years of spending visibility. -
The addressable market is around S$1.2bn a year, based on historical awards.
Lim & Tan reviewed GeBIZ procurement from 2021–26 and estimates that awards in roads, cycling paths, linkways and bridges have averaged around S$1.2bn annually over 2023–26.There is ample scope for OKP to sustain a S$700–800m order book.
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Cycling-path spending is still far from exhausted.
Lim & Tan says S$1.85bn has been approved for cycling-path projects but only S$0.46bn spent so far — leaving about three-quarters of the programme yet to be spent.This is a strong new evidence against the "construction cycle has peaked" bear case.
| The moat, the niche |
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The moat is not just experience—it is operating structure.
The report adds detail on OKP's in-house workforce. OKP uses multiple small teams that can be moved across different sites.
This allows more work to be executed without a proportionate increase in manpower, creating operating leverage and better cost absorption.Previously, the moat was mainly framed as tendering discipline and agency-coordination know-how. Lim & Tan adds labour deployment efficiency as another structural advantage.
Real challenge 
Unlike conventional building projects, commuter infrastructure works require a different execution skillset. Contractors have to work around existing roads, utilities and public infrastructure while
clearing approvals and coordinating across multiple government agencies. For contractors with limited experience in such works,
projects can simply stop moving. When that happens, workers and equipment remain mobilised on site, fixed costs continue to run and revenue recognition is delayed.
-- Nicholas Yon, analyst,
Lim & Tan Research -
OKP may have a particularly attractive contract-size niche: S$100m–S$300m.
Lim & Tan argues these projects are large enough to matter for OKP, but potentially too small for larger contractors with heavier fixed-cost structures.It suggests OKP may occupy a "sweet spot" rather than competing head-on with mega-contractors.
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The future opportunity is broader than cycling paths.
Lim & Tan highlights ancillary works around roughly 98 new MRT stations, expansion of sheltered-walkway coverage from 400m to 800m around stations, infrastructure needed for around 80,000 new homes, and further pedestrian-overhead-bridge lift retrofits.
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Interestingly, Lim and Tan's earnings forecasts are not especially aggressive:
Lim & Tan notes that competitors can win slices of the pie, and government budgets are subject to annual approval. It also notes that 11 contractors have won cycling-path contracts since 2021. That last point points to the existence of credible competition, even though OKP presently appears to execute better than many. |
→ See also:OKP: Isn't This What Deep Value Looks Like: ~5x Ex-Cash P/E, $135M Cash Hoard, Record Order Book?
