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HQU

Oiltek International

$0.8 0.3B market cap February 2026
Oiltek International Limited HQU BUFFETT / MUNGER / KLARMAN SUMMARY
1 SNAPSHOT
Price$0.8
Market Cap0.3B
2 BUSINESS

Oiltek International is a rare small-cap quality compounder in a niche with genuine structural tailwinds. The combination of proprietary technology in edible oil refining and enzymatic biodiesel, a 44-year track record across 37 countries, zero debt, and 30%+ ROE is compelling. Indonesia's progressive biodiesel mandates (B40 to B50) and the emerging SAF market create multi-year demand for Oiltek's engineering capabilities. However, at SGD 0.80, the market is pricing the stock at 34x trailing earnings and 11x book after a five-fold run from IPO price. For a company with only 79 employees, lumpy project-based revenue, and a 68% controlling shareholder, the current price offers no margin of safety. The business deserves a quality premium but not to this degree. Patient investors should wait for a meaningful pullback.

3 MOAT NARROW

44+ years expertise, 650+ plants built in 37 countries, 5 patents (3 pending) in edible oil refining and enzymatic biodiesel. Niche market with comprehensive integrated EPCC capabilities.

4 MANAGEMENT
CEO: Henry Yong Khai Weng

Good - Zero debt maintained, disciplined dividend policy (40%+ payout), IPO proceeds still undeployed, exploring strategic M&A

5 ECONOMICS
22.6% Op Margin
28% ROIC
32% ROE
33.9x P/E
0.004B FCF
-100% Debt/EBITDA
6 VALUATION
FCF Yield1.2%
DCF Range0.6 - 0.7

Overvalued by 14-33%

7 MUNGER INVERSION
Kill Event Severity P() E[Loss]
Valuation at 34x trailing earnings prices in perfection; project concentration means revenue is lumpy and dependent on a few large contracts HIGH - -
Koh Brothers 68% controlling shareholder; only 79 employees limits scalability; FX volatility (RM8.2M loss in FY2025) MED - -
8 KLARMAN LENS
Downside Case

Valuation at 34x trailing earnings prices in perfection; project concentration means revenue is lumpy and dependent on a few large contracts

Why Market Right

Multiple contraction if growth disappoints; Alfa Laval/Desmet competitive intensification; Palm oil price volatility reducing customer capex; Delay in Indonesia B50 implementation

Catalysts

Indonesia B50 biodiesel mandate in 2026 requiring new plant capacity; Pertamina partnership for SAF/HVO pre-treatment unit; Bursa Malaysia Main Market secondary listing to broaden investor base; Bonus share issue (2-for-1) improving liquidity; Sustainable Aviation Fuel demand growth in Southeast Asia

9 VERDICT WAIT
A- Quality Strong - Zero debt, cash equals 100% of net assets. Financial fortress for a small-cap.
Strong Buy$0.4
Buy$0.55
Fair Value$0.7

Add to watchlist. Set price alerts at SGD 0.55 (accumulate) and SGD 0.40 (strong buy). Monitor quarterly order book and Indonesia biodiesel mandate progress.

🧠 ULTRATHINK Deep Philosophical Analysis

Oiltek International: The Engineer's Edge in an Agri-Tech World

The Core Question

What is Oiltek International, really? Strip away the SGX listing, the Catalist Board sponsorship, the investor relations polish -- what is it at its core?

It is a 44-year-old Malaysian engineering workshop that knows how to build vegetable oil refineries and biodiesel plants better than almost anyone in Southeast Asia. It employs 79 people. It carries zero debt. It holds five patents for processes that transform crude palm oil into refined products and fatty acids into biodiesel. And it has built 650 plants in 37 countries.

This is not a tech startup with network effects or a platform business with winner-take-all dynamics. It is an old-fashioned engineering company that has gotten very, very good at a narrow thing over four decades. The question is whether that narrow excellence translates into a durable competitive advantage -- and whether the current price respects the nature of what you are buying.

Moat Meditation

Charlie Munger would appreciate the niche. Oiltek occupies a space in the vegetable oils value chain that sits between giant European engineering firms (Alfa Laval, Buhler) and local fabricators who can build simple structures but lack the process technology knowhow to design and commission a 2,800 metric tonne/day physical refinery.

The moat here is not wide in the classical Buffett sense. There are no regulatory barriers preventing a competitor from entering this market. There is no network effect. There is no consumer brand. What exists instead is accumulated institutional knowledge: knowing which crystallizer design works for Malaysian palm oil versus Indonesian palm oil, understanding the precise temperature profiles needed for enzymatic esterification of high free-fatty-acid feedstocks, having the proprietary process control software that automates a physical refinery.

This is expertise-based competitive advantage. It is real but narrow. A well-funded competitor could, over 5-10 years, develop similar capabilities. The question is whether anyone would bother. The global vegetable oil EPCC market is substantial but fragmented, and the returns available to a niche Malaysian engineering firm are not attractive enough to justify a major multinational redirecting resources to compete head-on. Alfa Laval acquired Desmet precisely because it was easier to buy expertise than build it. That acquisition validates Oiltek's market but also introduces a well-capitalized competitor.

The most durable moat element is the installed base: 650+ plants across 37 countries. Every plant Oiltek has built becomes a reference client, a source of recurring maintenance and upgrade revenue, and a door-opener for the next project. Engineering contracts in Indonesia, Africa, and Latin America are won through relationships, trust, and track record. You cannot replicate decades of relationship capital with a single acquisition.

The Owner's Mindset

Would Warren Buffett own this for 20 years? The honest answer is probably not, because it is too small, too project-dependent, and too concentrated in a single industry. Buffett likes businesses where the next decade looks like the last decade, where the earnings stream is predictable and growing. Oiltek's engineering revenue is inherently lumpy -- a single RM80 million milestone billing can swing quarterly results dramatically.

But there is something Buffett-like about the business model itself. Zero debt. Cash equal to net assets. An asset-light model where intellectual property and human capital are the primary assets. A 44-year track record of steady growth through cycles. A return on equity above 30%. If you put this business in a private equity portfolio and judged it purely on financial metrics, it would be among the best.

The controlling shareholder situation is concerning. Koh Brothers Eco Engineering owns 68.14% of shares. This is not an owner-operator in the traditional sense; it is a subsidiary of a larger conglomerate. CEO Henry Yong holds 5.6% and has deep industry expertise, but the ultimate decisions rest with Koh Brothers. The question is whether Koh Brothers views Oiltek as a long-term strategic asset or as a vehicle for financial engineering. The proposed bonus share issue and Bursa Malaysia listing suggest genuine growth ambition, not extraction. But minority shareholders should remain watchful.

Risk Inversion

What could destroy this business? Let me think about this the Munger way, by inverting.

First, a catastrophic project failure. If an Oiltek-built plant explodes, malfunctions, or fails to meet specifications, the reputational damage could be devastating. With only 79 employees, one major project failure could consume all management attention and financial resources. Insurance mitigates this but does not eliminate it.

Second, technology disruption. If a new refining technology makes physical refining obsolete, Oiltek's accumulated expertise becomes worthless. This is unlikely in the near term -- vegetable oil refining is a mature, well-understood industrial process. But the shift from chemical to physical refining happened within Oiltek's lifetime, and future process innovations could similarly reshape the industry.

Third, market concentration collapse. If Indonesia reverses its biodiesel mandates (unlikely given energy security motivations but not impossible), Oiltek's renewable energy growth story evaporates. The company is betting heavily on Indonesia's progression from B35 to B40 to B50. Any reversal would directly impact order flow.

Fourth, and most likely: the company simply fails to scale. Seventy-nine employees cannot execute RM400 million of backlog without strain. As projects grow larger and more complex, the risk of execution failures increases. Hiring and training engineers in this niche takes years. Growth could be self-limiting.

Valuation Philosophy

Here is where the tension lies. At SGD 0.80, the market assigns Oiltek a valuation of SGD 343 million, or roughly 34 times trailing earnings and 11 times book value. For a company with RM32 million in net profit (approximately SGD 10 million), this is an extraordinary premium.

Is it justified? The market is clearly pricing in several years of 15-20% earnings growth driven by biodiesel mandates, SAF opportunity, and margin expansion. The FY2025 gross margin of 32.5% (up from 23.9% in FY2024) is being extrapolated forward as a permanent improvement. The Pertamina partnership is being valued as a done deal.

I am skeptical. Project-based businesses have inherently volatile margins. The FY2025 margin improvement was driven by the revenue mix shift toward renewable energy (249.7% growth), while the core edible oil refinery segment declined 30.7%. This is not a structural margin uplift; it is project-mix-driven. Next year's mix could look entirely different.

Seth Klarman would remind us that the best businesses in the world are poor investments at the wrong price. Oiltek at SGD 0.40 -- where you pay 17 times normalized earnings and get a 3% yield on a zero-debt, 30%+ ROE business with structural tailwinds -- is a wonderful investment. Oiltek at SGD 0.80 -- where you pay 34 times earnings for lumpy, project-based revenue from a 79-person company -- is speculation on continued momentum.

The five-fold price increase since the March 2022 IPO at approximately SGD 0.16 has been driven by genuine fundamental improvement: revenue has more than doubled, margins have expanded, and the biodiesel narrative has strengthened. But at some point, the price must reflect the reality of what you own: a small engineering company in Shah Alam, Malaysia, that builds very good oil refineries and biodiesel plants. That is valuable. It is not worth 34 times earnings.

The Patient Investor's Path

The right approach here is simple: admire the business, study the industry, and wait for the price to come to you.

Oiltek will almost certainly face a quarter or two where the order book disappoints, where project timing causes an earnings miss, or where currency movements mask underlying performance (as the RM8.2 million FX loss did in FY2025). Project-based engineering companies always do. When that happens, the stock -- which has risen five-fold on enthusiasm -- will correct.

When it does, the business quality will still be there: the 44 years of expertise, the zero debt, the proprietary technology, the structural biodiesel tailwinds. At SGD 0.55 or below, you would own all of that at a reasonable price.

Until then, watch and learn. Study the quarterly order book announcements. Track Indonesia's B50 implementation timeline. Monitor the Pertamina partnership for conversion to a binding agreement. Understand the competitive dynamics as Alfa Laval integrates Desmet. Build your conviction in the business so that when the price opportunity arrives, you act without hesitation.

The best investments are made when quality meets price. Oiltek has the quality. It does not yet have the price.

Executive Summary

Oiltek International is a Malaysian-headquartered, Singapore-listed (SGX Catalist: HQU) integrated process technology and renewable energy solutions provider for the global vegetable oils industry. Founded in 1980, the company has 44+ years of experience, 650+ plants built across 37+ countries on 5 continents, and holds proprietary patented technologies in edible oil refining and biodiesel production. The business is asset-light with zero debt, strong cash generation, and returns on equity exceeding 30%. However, at SGD 0.80 per share, the stock trades at ~34x trailing earnings after a five-fold price increase since IPO, leaving limited margin of safety.

Metric Value Assessment
Quality Grade A- High ROE, asset-light, zero debt
ROE (FY2025) 32.0% Excellent
ROE (FY2024) 35.2% Excellent
Moat Width Narrow Niche expertise + switching costs
Dividend Yield 1.5% Low but growing
Fair Value SGD 0.60-0.70 ~20-25x normalized earnings
Strong Buy Price SGD 0.40 ~15x earnings, 4.5% yield
Accumulate Price SGD 0.55 ~20x earnings, 3.3% yield

Phase 1: Business Overview

What Oiltek Does

Oiltek designs, engineers, procures, constructs, and commissions (EPCC) plants for the global vegetable oils industry. The company operates through three segments:

  1. Edible & Non-Edible Oil Refinery (63% of FY2025 revenue): Physical/steam refining plants, chemical refining, dry fractionation, winterisation, hydrogenation, interesterification, texturisation, phytonutrient extraction, and premium specialty animal feed processing plants.

  2. Renewable Energy (29% of FY2025 revenue): Multi-feedstock biodiesel plants, proprietary enzymatic biodiesel processes, HVO feedstock treatment, winter fuel plants, and POME (Palm Oil Mill Effluent) biogas methane recovery.

  3. Product Sales and Trading (7% of FY2025 revenue): Engineering component sales, specialty chemical product trading, agency and distributorship (API Schmidt, TMCI Padovan, Kieselmann, GekaKonus, Novozymes).

Reporting Currency and Conversion

Oiltek reports in Malaysian Ringgit (RM/MYR). Approximate SGD/MYR conversion: 1 SGD = ~3.15 MYR. Share price is in SGD (listed on SGX).

Revenue by Segment (RM'000)

Segment FY2024 FY2023 FY2022 FY2021 FY2020
Edible & Non-Edible Oil Refinery 193,868 (84.2%) 157,408 (78.3%) 135,137 (82.5%) 74,262 (73.8%) 58,880 (67.3%)
Renewable Energy 17,647 (7.7%) 25,090 (12.5%) 13,706 (8.4%) 17,051 (16.9%) 17,587 (20.1%)
Product Sales & Trading 18,777 (8.1%) 18,616 (9.2%) 14,888 (9.1%) 9,315 (9.3%) 11,071 (12.6%)
Total 230,292 201,114 163,731 100,628 87,538

FY2025 Segment Breakdown (from full-year results)

Segment FY2025 (RM M) FY2024 (RM M) Change
Edible & Non-Edible Oil Refinery 134.37 193.87 -30.7%
Renewable Energy 61.72 17.65 +249.7%
Product Sales & Trading 15.35 18.78 -18.3%
Total 211.43 230.29 -8.2%

Revenue by Geography (FY2024)

Region RM'000 %
Asia 200,950 87.3%
Africa 5,261 2.3%
America 24,081 10.4%
Total 230,292 100%

Revenue is overwhelmingly Asia-driven, primarily from Indonesia, Malaysia, and other palm oil producing nations. The company has growing traction in Latin America and Africa.

Key Financial Metrics

Metric FY2025 FY2024 FY2023 FY2022 FY2021
Revenue (RM M) 211.4 230.3 201.1 163.7 100.6
Gross Profit (RM M) 68.7 55.1 39.2 30.6 23.6
Net Profit (RM M) 32.0 29.6 19.1 12.7 9.7
Gross Margin 32.5% 23.9% 19.5% 18.7% 23.4%
Net Margin 15.1% 12.9% 9.5% 7.7% 9.6%
ROE 32.0% 35.2% 28.2% ~23.7% ~28.2%
ROA 17.0% 13.7% 10.3% ~10.3% ~11.8%
EPS (sen) 7.5 6.9 4.5 3.0 2.7
EPS (SGD) 0.024 0.021 0.013 0.009 -

Balance Sheet Highlights (RM'000)

Item FY2024 FY2023 FY2022 FY2021 FY2020
Cash & Bank Balances 106,143 132,460 67,360 42,896 51,292
Total Assets 216,525 185,233 122,472 82,239 67,567
Total Liabilities 132,238 117,489 68,993 47,876 33,481
Total Equity 84,287 67,744 53,479 34,363 34,086
Debt Zero Zero Zero Zero Zero

The company maintains zero debt and holds cash equal to or exceeding total equity. As at 31 December 2025, net assets are RM99.9 million with RM99.7 million in cash. This is a genuine financial fortress.

Cash Flow Statement (FY2024, RM'000)

Item FY2024 FY2023
Profit after tax 29,643 19,120
Net cash from operating activities (11,681) 68,763
Net cash from investing activities (585) (303)
Net cash from financing (dividends) (12,096) (5,852)
Net change in cash (24,362) 62,608

Note: FY2024 operating cash flow was negative due to timing of large milestone receivables (~RM80M collected in January 2025). This is typical for project-based engineering businesses. FY2025 showed positive operating cash flow of RM14.1M.

Phase 2: Moat Analysis

Moat Sources

  1. Proprietary Process Technology (5 patents, 3 pending): Oiltek holds patents for dry fractionation crystallization, physical palm oil refinery automation, low-colour refined oil production, continuous deodoriser with heat recovery, and enzymatic biodiesel esterification. These provide genuine differentiation versus competitors. The company targets new innovations every 180 days.

  2. 44+ Years of Niche Expertise & Track Record: Having built 650+ plants in 37 countries creates a formidable reference base. Clients choosing an EPCC contractor for a RM50-200M refinery plant need confidence in execution. Oiltek's track record is a powerful competitive advantage that cannot be replicated quickly.

  3. Switching Costs: Once a customer has an Oiltek-designed plant, they naturally return for upgrades, retrofits, and additional capacity. The Product Sales & Trading segment generates recurring revenue from installed base consumables and components.

  4. Niche Market Positioning: Oiltek occupies a space between large global players (Alfa Laval/Desmet, Buhler) and local fabricators. It offers integrated end-to-end EPCC capabilities specifically for vegetable oils at competitive pricing. Its comprehensive coverage of the entire vegetable oil value chain with proprietary technology has few direct competitors.

  5. Relationship-Based Business: Engineering projects in emerging markets (Indonesia, Africa, Latin America) are won through trust, local knowledge, and long-standing relationships. Oiltek has cultivated these over decades.

Moat Width: NARROW

While Oiltek has genuine competitive advantages, the moat is narrow rather than wide because:

  • The EPCC engineering sector is fragmented with low barriers to entry at the lower end
  • Alfa Laval acquired Desmet (world leader in edible oil/biofuel engineering) and could intensify competition
  • Customer concentration risk exists (top customers can be large individual projects)
  • Small company size (79 employees) means limited capacity to scale rapidly
  • Project-based revenue is inherently lumpy and cyclical

Competitive Landscape

Competitor Size Overlap Threat
Alfa Laval/Desmet ~EUR 50B market cap High - edible oil + biofuel Medium-High
Buhler Group ~CHF 3.4B revenue Moderate - oil processing Medium
Crown Iron Works Private Moderate - extraction Medium
Local fabricators Small Low - no technology Low

Oiltek's advantage is its integrated technology + EPCC + proprietary processes combination, particularly in enzymatic biodiesel, which is genuinely differentiated.

Phase 3: Growth Drivers and Market Tailwinds

Indonesia Biodiesel Mandates

Indonesia, the world's largest palm oil producer, has progressively increased its biodiesel blending mandate:

  • B30 (30%) implemented
  • B35 (35%) mandated in 2024
  • B40 (40%) went into effect January 2025
  • B50 (50%) planned for 2026

Each mandate increase requires new biodiesel plant capacity. Oiltek's proprietary enzymatic biodiesel technology and multi-feedstock capability position it as a key beneficiary. Five additional large-scale biodiesel plants are needed for B50, and only three are under construction.

Sustainable Aviation Fuel (SAF)

The aviation industry's commitment to net-zero by 2050 is driving SAF demand. Southeast Asia's feedstocks are projected to supply ~12% of global SAF by 2050. Oiltek's HVO feedstock treatment capabilities and POME-to-biofuel technology are directly relevant.

Oiltek has signed a Heads of Agreement with PT Kilang Pertamina Internasional (KPI) for joint development of a Pre-Treatment Unit, converting alternative feedstocks to SAF and HVO products. This partnership with Indonesia's state-owned oil company signals credibility and market access.

Global Vegetable Oil Market Growth

The global fats and oils market is projected to grow from USD 257 billion (2023) to USD 403 billion by 2033 (4.6% CAGR). Population growth, rising incomes in emerging markets, and increased food demand drive this structural trend.

Order Book

Period Order Book (RM M) Delivery Timeline
End of FY2024 ~354.9 18-24 months
Mid-2025 ~398.2 18-24 months
End of FY2025 ~312.8 18-24 months

The order book provides 1.5x trailing revenue visibility and underpins near-term earnings.

Strategic Initiatives

  1. Bursa Malaysia Main Market Listing: Filed application in February 2025 for a secondary listing. This will broaden investor access, improve liquidity, and enhance the company's profile in its home market.
  2. Potential Bonus Share Issue: 2-for-1 bonus shares proposed in March 2025, reflecting confidence and improving trading liquidity.
  3. Pertamina Partnership: Joint development of Pre-Treatment Unit for SAF/HVO production, linking Oiltek to Indonesia's massive biodiesel infrastructure buildout.

Phase 4: Risk Assessment

Key Risks

  1. Valuation Risk (HIGH): At SGD 0.80, the stock trades at ~34x TTM earnings and ~11x book value. This prices in significant growth that may not materialize. A multiple contraction to 20x earnings would imply SGD 0.48.

  2. Project Concentration Risk (HIGH): Engineering revenue is lumpy. A few large projects (RM80M milestone billing in Q4 2024 from three customers) dominate results. Loss of a major contract or delay could significantly impact earnings.

  3. Controlling Shareholder Risk (MEDIUM): Koh Brothers Eco Engineering holds 68.14% of shares. This provides stability but means minority shareholders have limited influence. Related-party dynamics (multiple Koh Brothers board representatives) warrant monitoring.

  4. Currency Risk (MEDIUM): Revenue is in multiple currencies (USD, RM, IDR) but reported in RM. FY2025 saw RM8.2M in FX losses that masked underlying profit growth of 48.7%.

  5. Commodity Cycle Risk (MEDIUM): Palm oil price swings affect customer capex decisions. Low CPO prices reduce refiner profitability and delay capacity expansions. High CPO prices could similarly reduce demand for certain products.

  6. Competition Risk (MEDIUM): Alfa Laval's acquisition of Desmet creates a global powerhouse in edible oil and biofuel engineering. This could intensify competition for larger projects.

  7. Small Team Risk (MEDIUM): With only 79 employees, Oiltek's capacity to execute multiple large projects simultaneously is limited. Key person risk around CEO Henry Yong (25+ years of industry experience) is real.

  8. Regulatory Risk (LOW-MEDIUM): Biodiesel mandates in Indonesia could be delayed (B40 faced delays in 2024-2025). Government policy changes could slow renewable energy investment.

  9. Geopolitical Risk (LOW-MEDIUM): Operations spanning 37 countries expose Oiltek to political instability, sanctions, and trade barriers. Projects in Africa and Latin America carry execution risk.

Phase 5: Management Assessment

CEO: Henry Yong Khai Weng (Age 54)

  • Managing Oiltek since May 2008 (17+ years)
  • Chemical Engineering degree (First Class Honours) from University of Malaya
  • Deep industry background: started as process engineer in biodiesel/phytonutrient extraction in 1997
  • Entrepreneurial awards recipient (Asia Success Inc 2013, Asia Excellence Entrepreneur Federation 2013/2015/2019)
  • Holds 5.63% of shares directly (~SGD 13M stake), plus shares via Koh Brothers entities
  • Total insider ownership: ~10.4%

Key Executives

  • Yap Ping Sing (Head of Technical, Age 60): Joined 1989, 35+ years with the company. Registered engineer.
  • Tai Cheng Huat (COO, Age 58): Joined 1993, 31+ years. Manages operations division.
  • Goh Chee Yong (CFO, Age 40): Joined 2021. Previously at Koh Brothers Eco Engineering.
  • Cheng Cia Cia (Head of Marketing/Sales, Age 41): Joined 2010. Chemical Engineering graduate.

Assessment: GOOD

The management team has deep technical expertise and long tenure. CEO Henry Yong has skin in the game (~5.6% ownership). The team is stable with key technical leaders serving 30+ years. The main concern is the Koh Brothers Group's dominant influence (68% ownership, multiple board seats) and the risk that subsidiary interests may not always align with minority shareholders.

Phase 6: Valuation

Earnings Power

Scenario Net Profit (RM M) EPS (SGD) PE at SGD 0.80
Bear (order book decline) 22 0.016 50x
Base (stable growth) 35 0.026 31x
Bull (biodiesel boom) 45 0.033 24x

Normalized Earnings Approach

5-year average net margin: ~11%. Normalized revenue: ~RM220M. Normalized earnings: ~RM24M = ~SGD 7.6M. At 20x normalized earnings: SGD 152M market cap / 429M shares = SGD 0.35/share. At 25x normalized earnings (quality premium): SGD 0.44/share.

The current price of SGD 0.80 implies ~33x normalized earnings or requires sustained 15%+ earnings growth for the next 5 years.

Fair Value Range

Method Low High
PE-based (20-25x FY2025 EPS) SGD 0.48 SGD 0.60
PE-based (20-25x forward EPS) SGD 0.52 SGD 0.65
DCF (12% discount, 15% growth 5yr) SGD 0.55 SGD 0.70
Net cash backing SGD 0.07 -

Fair Value Estimate: SGD 0.60-0.70

Entry Prices

Level Price (SGD) PE Ratio Yield Gap from Current
Strong Buy 0.40 ~17x ~3.0% -50%
Accumulate 0.55 ~23x ~2.2% -31%
Fair Value 0.65 ~27x ~1.8% -19%
Current 0.80 ~34x ~1.5% -

Phase 7: Investment Decision

Verdict: WAIT

Oiltek International is a genuinely impressive niche business. The combination of 44 years of expertise, proprietary technology, zero debt, 30%+ ROE, and structural tailwinds from biodiesel mandates and SAF demand make it a high-quality small-cap. The Pertamina partnership and Bursa Malaysia listing plans signal continued momentum.

However, the stock is expensive. At SGD 0.80, you are paying ~34x trailing earnings and ~11x book value for a small-cap EPCC company with only 79 employees and inherently lumpy, project-based revenue. The five-fold price increase since the March 2022 IPO has priced in much of the growth story.

What Would Change My Mind

  • Price below SGD 0.55: Would provide adequate margin of safety for the quality of the business
  • Order book exceeds RM500M: Would signal acceleration beyond current trajectory
  • SAF partnership converts to binding contract: Would add a major recurring revenue stream
  • Structural margin improvement sustained: FY2025's 32.5% gross margin needs to prove durable, not project-mix driven

What to Watch

  1. Bursa Malaysia listing progress and timing
  2. Indonesia B50 mandate implementation in 2026
  3. Pertamina PTU partnership conversion to definitive agreement
  4. Quarterly order book and revenue recognition trends
  5. Currency hedging effectiveness (RM8.2M FX loss in FY2025)

Dividend History

Year Total Dividend (SGD cents) Payout Ratio
FY2025 1.20 ~52.5%
FY2024 2.70 ~44.4%
FY2023 1.60 ~40.7%
FY2022 1.20 ~43.3%

The company has a stated policy of distributing at least 40% of net profit. Dividend growth has been strong, but the yield at current prices (~1.5%) is modest.

Source Documents

  • Oiltek International Annual Report 2024 (PDF downloaded)
  • Oiltek IR website: https://oiltek.listedcompany.com/
  • SGX filings and announcements
  • StockAnalysis.com financial data
  • The Star Malaysia: FY2025 results coverage
  • Minichart.com.sg: FY2025 segment analysis
  • SGX 10-in-10 market dialogue (November 2024)
  • Indonesia MEMR biodiesel mandate data