In addition, Oiltek has the right to take an equity stake in future stages of the facility.
Mo estimates that a 10% stake in the plant could generate around RM14 -28 million of recurring earnings per year, based on 10-20% ROI of the plant’s RM1.4 billion construction value.
"This is a significant sum, equivalent to 45-90% of Oiltek’s 2025 earnings," says Mo.
She points out that Oiltek is now trading at only 17x 2027 PE, around 25% discount vs the tech manufacturers in Singapore and Malaysia, despite having a better asset-light business model, earnings per share growth, return on equity and net margin.
See also: DBS raises target price for Bumitama Agri to $2.30
Her revised target price of $2.78 is based on a revised 28x FY2027 earnings.
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