Catalist-listed Oiltek should explore upgrading to the Singapore Exchange ’s (SGX) Mainboard, says CGS International analyst William Tng.
The upgrade could “garner more interest and make it more investible given the more prestigious Mainboard listing status”, the analyst adds in his Jan 14 report, which comes after the brokerage hosted Oiltek at its inaugural Value Up conference on the same day.
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: CGSI ups Food Empire’s TP to $1.53 with Vietnam ‘likely to shine’ in FY2024 results
Shares in Oiltek closed 3 cents higher or 2.86% up at $1.08 on Jan 17.
