OSK diversification plan pays off
PETALING JAYA: Hong Leong Investment Bank (HLIB) Research remains positive on OSK Holdings Bhd 's prospects, underpinned by its fast-growing private credit and cables segments, which are driving earnings and diversifying the group's income base beyond property.
OSK had announced the acquisition of Wilayah Credit, a motorcycle financing company, which currently has a loan portfolio of about RM40mil. Post-acquisition, OSK can unlock growth by leveraging on its stronger funding capacity.
HLIB Research said the acquisition also offers risk diversification benefits by reducing reliance on a single segment in consumer financing, allowing the group to build a more balanced and robust financing portfolio.
'We believe investors continue to undervalue the group's private credit segment.
'For perspective, Qualitas Ltd, which is a listed Australian firm specialising in private credit investments in real estate, is expected to deliver a financial year 2024 (FY24) to FY27 compounded annual growth rate (CAGR) of 25.1% and currently trades at 23.9 times FY26 price earnings ratio, based on consensus estimates.
'Similar to Qualitas, OSK also has private credit exposure in Australia primarily in the real estate segment that makes up 28% of the loan portfolio. In fact, compared wth Qualitas, OSK's loan portfolio has a more balanced and diversified mix both geographically and across customer segments, giving it the advantage of risk diversification,' the research house added.
OSK's private credit segment demonstrated a strong track record, delivering a robust six-year pre-tax profit CAGR of 25.1% from FY18 o FY24, which is on par with Qualitas expected growth rate.
'Having grown to a meaningful scale, the segment is well positioned to gain increasing investor visibility as it emerges as a key earnings driver for the group moving forward,' HLIB Research noted.
The cables segment is expected to post strong earnings in the second quarter of 2025, supported by the completion of major deliveries to a utility company.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
2 hours ago
- New Straits Times
Dollar holds losses on US economy concerns, Fed appointments
TOKYO: The dollar remained lower against major peers on Thursday, as expectations of Federal Reserve rate cuts grew and concerns swirled about partisanship creeping into key US institutions. Initial jobless claims in the United States are under scrutiny after last week's disappointing nonfarm payrolls, which triggered a slide in the greenback. Meanwhile, the euro found support ahead of anticipated talks next week to end the war between Russia and Ukraine. Last week, President Donald Trump fired the official responsible for the labour data he did not like, and focus is centring on his nomination to fill a coming vacancy on the Fed's Board of Governors and candidates for the next chair of the central bank. "All those things suggest that we're seeing those political risks around the US dollar increase, and on top of that you've got the weak data coming through," said Tony Sycamore, a market analyst at IG. Any progress in ending the war in Ukraine "is going to be a positive driver of the euro," he added. The dollar index, which measures the greenback against a basket of major peers, edged up 0.1 per cent to 98.259 in early trade in Asia, after a 0.6 per cent slide in the previous session. The US currency was little changed at 147.36 yen. The euro stood at US$1.1654, down almost 0.1 per cent after a 0.7 per cent jump previously. The US Labor Department is expected to report that initial claims for unemployment benefits likely rose by 3,000 to 221,000 for the week ended August 2. Continued jobless claims for the week that ended July 26 are expected to increase slightly. Data last Friday showed US employment growth was weaker than expected in July while the nonfarm payrolls count for the prior two months was revised down considerably, suggesting a sharp deterioration in labour market conditions. Fed funds futures traders are now pricing in a 94 per cent probability of a 25 basis point cut at the Fed's September meeting, up from 48 per cent a week ago, according to the CME Group's FedWatch Tool. In total, traders see 60.5 basis points in cuts this year. Trump could meet Russian leader Vladimir Putin as soon as next week, a White House official said on Wednesday, as the US kept up pressure on Moscow to end the war in Ukraine. The president said on Tuesday he would decide on a nominee to replace outgoing Fed Governor Adriana Kugler by the end of the week and had separately narrowed the possible replacements for Fed Chair Jerome Powell to a short list of four. Sterling was steady at US$1.33505. The Australian dollar was little changed at US$0.65. Bitcoin edged 0.1 per cent lower to US$115,038.79.
The Star
9 hours ago
- The Star
Pahang Sultan raises stake in Citaglobal
PETALING JAYA: The Sultan of Pahang, Al-Sultan Abdullah Ri'ayatuddin Al-Mustafa Billah Shah, has bought more Citaglobal Bhd shares, just a day after the company proposed to acquire a major stake in the master developer of the Perlis Maritime Corridor for RM40mil. The Ruler acquired a total of 15 million shares in an off-market transaction on Aug 6. On the same day, Citaglobal chairman and president Tan Sri Mohamad Norza Zakaria disposed of 15 million shares for RM12mil. With the share purchase, the Pahang Ruler's equity interest in Citaglobal has risen to 13.25% from 9.47% earlier. Meanwhile, Norza's equity interest now stands at 1.64% directly and 27.67% indirectly.
New Straits Times
12 hours ago
- New Straits Times
Australia's new measures to strengthen education ties with Malaysia
KUALA LUMPUR: Australia's newly announced measures to boost Southeast Asian student enrolments from 2026 will create more opportunities for Malaysians to study at its universities and further strengthen the countries' longstanding higher education ties. Australian High Commissioner to Malaysia, Danielle Heinecke, said the new measures from next year aim to attract more international students from Southeast Asia, including Malaysia. She said Malaysia and Australia share a longstanding partnership in higher education, with strong institutional links, student mobility, and alumni networks built over decades. "Australia remains one of the most popular destinations for Malaysian students with more than 13,000 Malaysians currently studying in Australia. "The Australian government is prioritising Southeast Asia, this is great news for Malaysian students wanting a high-quality Australian education and student experience. "New efforts to boost the number of students will strengthen our people-to-people links and encourage more investment in Malaysia," she said in a statement. To date, around 500,000 Malaysians have pursued their studies with Australia's world-class education providers. Besides that, four Australian universities – Monash University Malaysia, Curtin University, Swinburne University of Technology and University of Wollongong – operate campuses in Malaysia, reflecting the strength of our education ties. On Aug 4, the Australian Government announced it would increase the number of international student places next year and introduce new measures to boost enrolments from Malaysia and other Southeast Asian countries. Under the new framework, a National Planning Level of 295,000 international student places will be introduced for 2026, representing a 9 per cent increase from 270,000 places in 2025. The Australian High Commission stated that Australia's public universities will be able to apply to increase their international student allocations for 2026, by demonstrating an increased engagement with Southeast Asia, through their education offerings, partnerships, campuses, alumni and scholarships. "As part of the reforms, universities will also be required to provide additional student accommodation to ensure both domestic and international students have access to safe and secure student housing. "These changes reflect the Australian government's commitment to building stronger ties with Southeast Asia, consistent with the strategy Invested: Australia's Southeast Asia Economic Strategy to 2040," it said.
