OKP generated record revenue of nearly $182 million last year and had an order book of over $600 million as at the end of 2024, enough to keep it busy until 2027. It boasts a workforce of 960, about three-quarters of whom are construction workers.
The numbers underscore how Singapore's unrelenting pace of infrastructure upgrades - while often frustrating for road users - has become a propellant of growth for builders like OKP, whose A1-grade certification from the Building and Construction Authority (BCA) allows it to bid for public-sector projects of unlimited value.
Some $47 billion to $53 billion worth of construction contracts in Singapore is expected to be awarded this year, according to BCA. That's more than the $44.2 billion dished out in 2024.
Contracts for several large-scale developments, such as Changi Airport Terminal 5 and the expansion of the Marina Bay Sands integrated resort, are expected to account for a big chunk of this year's haul.
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While OKP's existing projects are smaller in scale and value, they represent a steady stream of jobs being pushed out by the government as part of Singapore's long-term urban development.
"These are all already in the works or already ongoing. These projects will continue for the next few years," Or Toh Wat, OKP's group managing director, tells The Edge Singapore.
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'These projects will continue for the next few years,' says Or Toh Wat, OKP's group managing director / Photo: Albert Chua
Even with the local economy at risk of slowing down, Singapore's construction sector should still hold up, says Or, the second of OKP founder Or Kim Peow's three sons, all of whom are actively involved in the company. The patriarch started the business in 1966, listed it on the Singapore Exchange(SGX) in 2002, and is now OKP's chairman.
Amid rising global trade tensions following recent moves by the US to impose tariffs on imports from countries worldwide, Singapore recently downgraded its GDP forecast for this year to between 0% and 2% from 1% to 3%.
"If the government foresees that the economy will not be good, they will likely try to support it through pump-priming," says Toh Wat. "As far as the construction sector goes, there will still be a need for housing - public housing, especially - and the expansion of Changi Airport and the rail network will still continue."
Estate upgrading and Singapore's ongoing efforts to get its people to be more physically active are also working in OKP's favour. Some of its projects entail installing covered walkways in HDB estates and building cycling paths. These include contracts clinched last year worth a combined $171 million for the construction of two cycling park networks, which are expected to be completed later this year.
"There are many types of civil works, including highway bridges, airport infrastructure, drainage construction, and cycling paths. One area we've been focusing on in recent years is cycling paths for commuters. I call it commuter infrastructure," Toh Wat says.
Making sure roads and other infrastructure remain in tip-top condition is also a big part of OKP's business. Its maintenance division carries out reconstruction work on an array of infrastructure and public facilities, including roads, pavements, guardrails, drains and bus bays.
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OKP won three maintenance contracts last year. Two are from the Land Transport Authority (LTA) and one is from the national water agency PUB. Its maintenance business generated $61.7 million in revenue last year, accounting for 34% of OKP's topline.
This dual focus - on building and maintaining key transport infrastructure -enables OKP to weather industry fluctuations. Construction projects provide revenue bursts, while maintenance contracts offer recurring income that cushions the business through slower cycles.
"I think contractors - the established ones and those that are financially healthy - are going to do well for at least the next two years," says Daniel Or, one of OKP's executive directors and Toh Wat's younger brother.
"If you can position yourself to take advantage of the over $50 billion worth of jobs and get even a small slice of it, I think you will do well for the next three to five years," says Daniel, referencing the $47 billion to $53 billion worth of construction contracts forecast by BCA to be awarded this year.
Contractors, the established ones and those that are financially healthy, are going to do well for at least the next two years, says OKP's executive director Daniel Or / Phtoto: Albert Chua
Turnaround after legal woes
The Or family's optimism is noteworthy for another reason: OKP has been working hard to rebuild its reputation following two tragic accidents that occurred under its watch nearly a decade ago.
The first was a safety lapse in 2015 at the Yio Chu Kang Flyover that led to the death of a worker. Three others were injured. The company and one of its site supervisors were fined for the accident.
The second was the collapse in 2017 of a road viaduct under construction near the PIE exit to the Tampines Expressway. One worker was killed while 10 others were injured. One of OKP's subsidiaries was fined and two employees were jailed in 2021 for failing to ensure the safety of their on-site workers.
That same year, the subsidiary launched arbitration proceedings against the design consultant, CPG Consultants. It won the case in 2023 and was awarded $43.8 million, which gave a huge boost to OKP's bottom line that year.
"Back in July 2017, when the accident happened, everybody we knew said 'You'll be out of business for sure'. We fought all the way in the State Court because we were charged by the Attorney-General's Chambers. The trial ended in 2022. During this period, our subsidiary didn't get any jobs," Daniel recounts.
The turnaround came after the court ruled in OKP's favour in 2023. Earnings for last year came in at $33.7 million on record revenue of $181.8 million. The company earned $44.6 million in 2023 on revenue of $160.4 million. The drop in earnings last year was due to the absence of the arbitral award in 2023 for the case against CPG Consultants.
With a $600 million order book extending into 2027, OKP will focus on execution and selective bidding rather than chase volume at the expense of profitability or risk, says Daniel. "We are picking our battles."
OKP will indeed have to pick its battles carefully, as the construction sector in Singapore is crowded and continues to grapple with challenges like higher raw material and manpower costs.
'Crocodiles and alligators'
On their part, investors have no lack of companies to choose from. There are more than half a dozen construction and civil engineering stocks on SGX, all competing for the same pool of infrastructure projects from both the public and private sectors.
Some of these companies, just like OKP, also have their own property development arm. Combining construction with property development allows them to have greater control over projects and unlock higher profit potential, although this could also entail more risks and capital outlays.
OKP usually embarks on property development projects through joint ventures with other developers. Contributions from property development to its bottom line are not substantial, and the company is content to focus on its core construction business.
OKP's closest peers include Hock Lian Seng Holdings, Ley Choon Group and Koh Brothers. These companies operate in the same core areas as OKP but differ in the extent of their involvement in public works and overseas markets. OKP's only market outside Singapore is Australia, where it owns a freehold four-storey office building in Perth that is tenanted out to companies and government bodies.
Among these four companies, OKP's latest order book of $600 million is the second largest. Koh Brothers leads the pack with its $829 million order book. Hock Lian Seng has the most net cash on hand, of about $159 million, followed by OKP, which has $109 million. On a per-share basis, however, OKP's net cash of 35.3 cents is more than Hock Lian Seng's 31.1 cents.
"I think everybody in this space has their own sweet spot," says Daniel. "There are plenty of jobs to go around. We wouldn't want to interfere in their space, and I think they wouldn't want to come into our space either. We're like crocodiles and alligators."
For now, as motorists inch their way through yet another bottleneck or navigate a freshly cordoned-off junction, it's a reminder to investors that every detour and delay feeds into a larger story - one that's driving the momentum of companies behind the barricades, like OKP.
