During its presentation, Oiltek’s management said it sees opportunities for growth from the continued requirements from refining plants driven by higher biodiesel blending requirements for Malaysia.
Sustainable aviation fuel (SAF), which only made up 0.3% of global jet fuel production in 2023, is also a potential revenue driver, a point which Tng flagged in his initiation report on Jan 6.
Oiltek’s management also reiterated its growth strategy in that it will continue to focus on larger scale projects, build up its product sales and trading segment and seek growth opportunities that can complement its existing business and, or build up a consistent and recurring revenue stream via several means. The strategy was already covered in the company’s annual report for FY2023, Tng notes.
Tng has kept his “add” call on Oiltek with a higher target price of $1.44 from $1.32 previously. The target price increase is due to rolled-over valuations based on the sector’s FY2026 average P/E of 18.4 times. Tng previously valued Oiltek at a FY2025 sector P/E of 18.8 times.
See also: UOBKH raises TP on SIA to $6.22, FY2026 earnings to see lift on fuel cost savings
Shares in Oiltek closed 3 cents higher or 2.86% up at $1.08 on Jan 17.
