Year End Performance Review & Assessment of OSK Holdings Berhad

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Most investors focus on the value of market capital gains and dividend distributions.


Let start with stock price of OSK, overall price momentum 1 year return of 3.9% uptrend. Also with payout dividend of 5 sen which was dividend yield of 5.4% in 2019.

Many however think this is not enough.

The next question is what will be the outlook of OSK in 2020? Let's review the trends were reported in the news in 2019 on OSK whether are more positive, neutral or negative.

News in 2019

+ = Positive
  1. OSK's Luminari completed 10 months early
  2. OSK 3Q net profit surges 69.4%, driven by property, financial services ops
  3. OSK's 2Q net profit jumps 50%, declares 2 sen dividend
  4. OSK posts stronger 1Q on higher property, financial services contributions
  5. Untung bersih OSK RM346.05 juta

0 = Neutral
  1. Johan to sell land to OSK unit for RM127 mil
  2. HR Asia Announces Malaysia's Best Companies to Work for in Asia
  3. Hilton to Enter Damai Laut with Debut of DoubleTree by Hilton Brand
  4. OSK partners Japan's Marubeni to bid for large scale solar project
  5. Hilton Partners With OSK Property and Employees Provident Fund Malaysia for Hilton Melbourne Square
  6. Malaysia's EPF invests $70m in Australian health care real estate
  7. OSK Property To Launch Two New Phases
  8. OSK Holdings Bhd. OSKホールディングス（５０５３）　ア
  9. 4 projek baharu OSK Property
  10. Negri Sembilan attracts 1st-time homebuyer
  11. Investing in conglomerates not quite in fashion but could have good yields
  12. Making city living more attainable
  13. Aabar Investments to exit RHB Bank
  14. Resort and holiday homes on the rise
  15. Building community: How Southbank’s Melbourne Square is designed to foster wellness
  16. Invest Malaysia 2019 - Research Guide by Maybank IB: Pricing in just RHB Bank
  17. Stocks On Radar - OSK Holdings (5053)
  18. AmWatch - Stock Focus Of The Day
- = Negative
  1. Property slowdown hits Asian developers
Most of the news of OSK were tend to be positive in 2019. Many of the neutral news related to OSK tend to be positive move to get ready for a sustainable businesses in long term. The only negative news related to property slowdown, however OSK seem to be taking very defensive and efficient move in property development.

Let do assessment of  OSK with SWOT analysis:

Strength

  1. Strong pipeline for its property deliveries and growth in properties development.
  2. Improved prospects for RHB Bank. 
  3. Top net margin among the peer of 34.7%
  4. QoQ & YoY profit and revenue growth
  5. Compound annual growth rate (last 5 years) CAGR = 10%

Weakness

  1. Low liquidity.
  2. Fair in increase shareholder value.
  3. Not actively covered by analysts.
  4. OSK did not repurchase, sell or reissue any of its own equity share capital during the year and previous few years.
  5. Warrants C 2015/2020 which remained not exercised to be expired on 22/07/2020.

Opportunities

  1. As at 30 September 2019, OSK has effective unbilled sales of RM1.69 billion. 
  2. OSK has a land bank of 1,722 acres with an estimated effective GDV of RM10.60 billion.
  3. Financial services and investment holding, with a net asset value of RM 2.567 Billion. 
  4. Top valuation among the peer, stock currently undervalued with trailing PE 4.5
  5. OSK seem to take long consolidation of businesses to prepare for a rise to reflect to shareholder value.
  6. OSK is getting more attractive as a hunting ground for privatisation or takeover targets.
  7. The Melbourne Square project in Australia has recorded take-up rate of above 72% since its launch and the construction is progressing as scheduled. FY2020 is expected to see the maiden profit recognition from Melbourne Square upon completion and settlement of Stage 1.
  8. Stable investors and ownership as of latest filing among Corporation, individuals, & Institutional Funds.

Treat

  1. Property market slowdown and softening market demand
  2. Potential crisis in financial sectors in uncertainty global trend.
  3. Stock market uncertainty.
As such what do you think OSK worth in 2020? Most probably to get a better return in market capital gains and dividend distributions?



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