Oiltek International

[weijian]

A micro cap supposed to list on Bursa Malaysia, before it eventually listed (raised 5mil gross proceeds with 30% of it listing expenses) on the SGX about 2.5years ago.

If its ultimate parent Koh Bro Group had delayed Oiltek's IPO plans by a year or two, it probably wouldn't have been listed here.

So, the Group currently has a order book of 378mil (to be fulfilled over the next 2years) when it did ~60mil of revenue in a full year 2023. That is a lot of revenue (and probably earnings) visibility down the road. No wonder share price has doubled since the start of the year!

Oiltek International secures new contracts from Africa, Central America and Malaysia worth RM19.5 million

• The new contracts bring its tally of new contracts secured in 2024 to-date to approximately RM152.3 million
 • The Group’s current order book of approximately RM378.3 million will be fulfilled in the next 18-24 months barring any unforeseen circumstances

https://links.sgx.com/FileOpen/Oiltek%20...eID=819130

[weijian]

A micro cap supposed to list on Bursa Malaysia, before it eventually listed (raised 5mil gross proceeds with 30% of it listing expenses) on the SGX about 2.5years ago.

If its ultimate parent Koh Bro Group had delayed Oiltek's IPO plans by a year or two, it probably wouldn't have been listed here.

So, the Group currently has a order book of 378mil (to be fulfilled over the next 2years) when it did ~60mil of revenue in a full year 2023. That is a lot of revenue (and probably earnings) visibility down the road. No wonder share price has doubled since the start of the year!

I looked at the date of my notes and saw that I reviewed Oiltek back in Aug2024. Back then, I thought it looked expensive because share price had doubled. Of course, I am humiliated again by Mr Market because it has since doubled again.

A couple of things going for this company:

(1) The company is project based (EPCC/turnkey contractor) but actually has negative working capital, thanks to much bigger contract liabilities than contract assets. The negative working capital is ~50% of its equity base and looks much better than even Sheng Siong!

(2) While it only IPO-ed a couple of years, it has a 40year operating track record. And most of its customers are the big palm oil planters we are familiar with. The company has a NPM~10% with ROE~20%. And if we look back at its past decade records (which could be extracted from Koh Bro Eco's segment reporting), it is quite consistent.

(3) Koh Bro and Koh Bro Eco will require funds for their construction projects' working capital. So Oiltek is almost guaranteed to keep paying cash upwards to its parent Koh Bro Eco who owns 68% of it. The 32% OPMIs are nicely positioned.

(4) It seems to have found itself a niche in providing systems to palm oil refineries to churn out more and more biofuels. With Indonesia/Malaysia mandating increasingly higher palm oil content in their biofuel, itself a response to the EU's proposed ban on palm oil, this tailwind looks strong for the company's niche.

[weijian]

Mr CEO Yong, a critical member of Oiltek International has sold ~0.68% of Oiltek and received ~2.6mil sgd. The proceeds are about 3-4x his annual salary + dividends. In the 2022 IPO, he did not sell any shares. As of now, he still owns ~5.63% of Oiltek.

NOTIFICATION FORM FOR DIRECTOR/CHIEF EXECUTIVE OFFICER IN RESPECT OF INTERESTS IN SECURITIES

https://links.sgx.com/FileOpen/_OIL%20-%...eID=864639

[weijian]

A micro cap supposed to list on Bursa Malaysia, before it eventually listed (raised 5mil gross proceeds with 30% of it listing expenses) on the SGX about 2.5years ago.

If its ultimate parent Koh Bro Group had delayed Oiltek's IPO plans by a year or two, it probably wouldn't have been listed here.

This micro cap has turned into a small-med cap. If tomorrow one were to calculate TSR returns of the top 50 stocks on SGX in the last 5 years, it should comfortably secure top position. The company has good stuff going for it. But when I treated it like an EPCC company that is project based with high working capital, the share price increase just felt "surreal".

Oiltek always had first prepared a Bursa listing but with a stroke of luck to the local bourse, it listed on the SGX. Now it is planning to return home (to Bursa) with a secondary listing. SGX already has a critical mass of upstream/fully integrated producers of vegetable oil and so it is not missing out anything by staying listed here. With optimism towards its prospects as evidenced by its stratospheric stock price performance in the last few years, it should be well appreciated and any equity fund raising (in the face of EQDP) should also be really easy. So when Mgt says "the Proposed Secondary Listing is a growth-oriented initiative" (emphasis mine), what does it really mean?

RESPONSES TO QUESTIONS RECEIVED FROM A SHAREHOLDER AND SECURITIES INVESTORS ASSOCIATION (SINGAPORE) RELATING TO ANNUAL GENERAL MEETING TO BE HELD ON 28 APRIL 2026

As announced on 21 July 2025, the Proposed Secondary Listing on the Main Market of Bursa Malaysia (“Proposed Secondary Listing”) will allow the Company to (a) widen its investor base, (b) potentially increase the liquidity of the Company’s shares and enhance the Company’s value through separate trading platforms, and © enable the Company to tap into additional platforms for future fund raising after taking into consideration investors’ demand as well as the cost of raising equity funding on the respective stock exchanges.

The Proposed Secondary Listing is a growth-oriented initiative and was not undertaken in response to any limitation of the Company’s listing on SGX. The Company’s principal operating subsidiary has been based in Malaysia for over 45 years, making Bursa Malaysia a natural complementary market for the Company’s shares. In addition, Malaysian investors are generally familiar with the vegetable oils and renewable energy sectors, representing a relevant investor base for the Company. The Proposed Secondary Listing also provides longer-term flexibility for capital raising, particularly as the Company undertakes larger-scale projects and explores commercially viable joint-venture opportunities.

https://links.sgx.com/FileOpen/OIL%20-%2...eID=885071

[specuvestor]

Hi Weijian any thoughts why a Malaysian company will benefit from primary listing in SGX during the SGX doldrums?

Seems like their 2025 FCF all paid out as dividends; and it's low capex low R&D in an engineering business. Interest income of RM3.3m seems consistent with RM100m cash

No doubt with high oil price and supply crunch, biodiesel is back. But I think to use for jet fuel probably is quite some time away base on my limited knowledge of energy density, especially for take off, and freezing point at high altitude
https://groupcesar.com/planes-kerosene-jet-fuel/

I chanced upon this site just for our information with no verification or opinion on my part; author bothered to set up a whole site also have to take pinch of salt. Just a spectator
https://whoisbioseaga.github.io/bioseaga-file/

[weijian]

Hi Weijian any thoughts why a Malaysian company will benefit from primary listing in SGX during the SGX doldrums?

Seems like their 2025 FCF all paid in dividends; and it's low capex low R&D in an engineering business. Interest income of RM3.3m seems consistent with RM100m cash

Hi specuvestor,

I will re-produce the PR by its parent Koh Bro Eco as below (dated Jan2020 in italics):

Shareholders should note that the Proposed Spin-off is at a preliminary stage and the Company has not formally appointed any professional advisors save for the legal advisers to the Company as to the Proposed Spin-off. Further, in addition to the ACE Market, the Company is also now considering the Catalist Board as the listing platform for the Spin-off Group (the “Proposed Listing”)

Jan2020 PR: https://links.sgx.com/FileOpen/2020.01.2...Z5BPTBLATZ

So from the PR, we can see that Bursa's ACE was the first option with SGX Catalist coming up as a secondary option later. From my old notes on Oiltek, I couldn't find any direct reason/s but that I too share some of your sceptism back then. After all, there were quite a no. of Msian-based developers listed on SGX that didn't have happy endings. In recent times, a super small Msian test lab LMS Compliance also listed on the SGX. From their post IPO financials, I did notice they received a one time grant from listing on SGX but I would assume that on-going compliance costs will eventually negate the one time grant gain. LMS Compliance did enjoy a big FX gain as their IPO proceeds were kept in SGD and appreciated against their functional currency RM. But this is more of a timing issue.

Off my head, one big difference is that a Bursa Msia ACE listing has the additional requirement of 12.5% of bumiputra ownership (post IPO enlarged capital). While, the % bumi ownership is not required during IPO but it has to be attained within a certain milestone or timeframe, whichever is earlier.

As for "SGX doldrums", I have been a SGX shareholder since 2008 and so might be able to add some color.   In the years of concern here (ie 2020/2021), SGX actually had relative vibrant equity and derivative activity if compared to the 2nd half of 2010s. This was thanks to covid-19 and a speedy stock market recovery. It was only the 2022 bear market and subsequent rise of Mag7 etc that condemned SGX. And if one contrasts to the Msia economy which had handicaps like a depreciating ringgit and unstable political situation, SGX might had been the more attractive option out of 2 plain looking options.

That all been said, I have no idea of the true reason/s that Oiltek eventually chose to list on SGX.

Actually Oitek's results were consolidated on Koh Bro Eco's financials and were for all to see in the segmental reporting. From my earlier notes, I had looked at them too and did not had any significant (red) flags. Oiltek's parents were loss making and depended on Oiltek to continue to pay upwards, in addition to all the warrants and rights issues that the parents did. The main insiders pre-IPO also did not sell out post IPO.

[weijian]

I chanced upon this site just for our information with no verification or opinion on my part; author bothered to set up a whole site also have to take pinch of salt. Just a spectator
https://whoisbioseaga.github.io/bioseaga-file/

Hi specuvestor,

Author of this site had mentioned that information (there isn't any opinion) are from publicly available sources. I had dealt with SSM records before and so I think it is legit.

My first question was "What is a Heads of Agreement (HOA)" and Gemini explained that it is a more advanced form of MOU where both are non-binding, but HOA contains specific numbers and milestones. If we liberally use the dating scene as an example, a MOU are 2 parties casually dating while a HOA are 2 dating parties actually starting to talk about dowry, how many kids they want and the type of housing they want to buy....

Oiltek's clarification suggest that they have done their due diligence and therefore already know what the website has published. I believe CEO Henry Yong is no stranger to the Msian corporate scene too.

An empty shell just needs a simple capital injection with new investors. Getting associated with ministers and legit investors are also good ways to boost one's profile. Will be interesting to see what transpires ahead.

In the meanwhile, Oiltek has lost all its gains since the 350mil SAF HOA was announced in early April.

RESPONSE TO ANONYMOUS ONLINE PUBLICATION REGARDING THE PROPOSED SAF PROJECT WITH BIOSEAGA INDUSTRIES SDN BHD

Mr Henry Yong (“Mr Yong”), the Executive Director and Chief Executive Officer of the Company, was re-introduced (through an appointed agent of the Company) to Mohd Emir Mavani Bin Abdullah (“Dr Emir”), the representative of PT Farmfresh Industries Indonesia (“PT Farmfresh”) in late 2025 to explore potential projects in Indonesia, including a refinery as well as a sustainable aviation fuel (“SAF”) initiative. Mr Yong had previous interactions with Dr Emir when he was Chief Executive Officer of a prominent Malaysian conglomerate in the palm oil agribusiness sector. Dr Emir subsequently introduced Mr Yong to Dr Haji Muhammad Nasiruddin Bin Dato Paduka Dr. Haji Abdul Latif (“Dr Nasir”) and other PT Farmfresh representatives and stakeholders. PT Farmfresh was represented to Mr Yong as an Indonesian company associated with Dr Nasir and which is involved in agriculture and food security programmes.

The Board is of the view that the initial preliminary due diligence conducted is generally commensurate with the transaction risk involved, considering that: (i) this is a typical vendorcustomer relationship; (ii) the HOA is largely non-binding1 and the Project is at a preliminary stage; (iii) the Project and the execution of any definitive agreements remain conditional upon satisfaction of the conditions as referred to in paragraph 4.2 of the HOA Announcement;2 and (iv) further due diligence will be conducted as the Project progresses and the counterparty takes steps to satisfy the conditions stated in the HOA before proceeding to the signing of a definitive agreement. The Board also relied on the business acumen and judgment of the Company’s management in their interactions with the counterparty to gauge their credibility and the viability of the Project.

https://links.sgx.com/FileOpen/OIL%20-%2...eID=891084

P.S. Admittedly, I only read the "anonymous online publication" here after reading Oiltek's SGX announcement.

[specuvestor]

Low paid up SPV is normal but it depends on the credit enhancements / guarantees implied or otherwise etc that gives payor comfort to invoice or pass ~US$300m through that entity ie how credible is the 2 parties track record