OKP Holdings interview

March 24th, 2026. OKP is listed as $5CF.SI

Mar 25, 2026

Summary:

OKP delivered great 2025 results (Revenue +33%, Net income +21%)
Exposure to higher oil or other inflation looks limited to mainly ~3 mSGD/y in higher fuel costs. This is low, driven by low fuel consumption, long term input contracts and low labor inflation. Other more earthwork focused companies will suffer much more.
OKP wants to use the large cash balance to bid for more projects and grow within Singapore’s construction boom providing a good environment until ~ 2028-2029.
OKP currently trades at 8x earnings or 4x ex-cash. The stock is up ~200% since the write up on the company last year and is currently not in the portfolio anymore.

At the end of the interview are some thoughts on why OKP/Soilbuild/Lincotrade are likely much less affected by the oil shock than KTC and Huationg.

Interview

Attendees

Mr. Daniel Or (Executive Director of OKP)

Thank you for taking the time to speak again, mister Or, and congratulations on another record year.

Thank you, Floe. Happy to speak with you!

Q: Let’s start with the macro. How do you see the construction market in Singapore right now?

A: The Building and Construction Authority is awarding about 50 bSGD in construction activities per year. Last year it was about 51.2 bSGD, and 2026 is going to be around the same amount. We are in a construction boom right now. Contractors have enough supply of projects in the market, so you don’t have to cut short and tender at very low prices. In terms of margins, things are looking good for our industry and this will continue for the next two to three years.

Q: OKP has done much better than other construction companies on margins. Why is that?

A: There are a few reasons. We don’t go after major and complex jobs. We never participated in the Changi Terminal 5 project, or the Changi East corridor. These major contracts have durations of seven to nine years. Once you lock in such long duration projects, you need a lot of people, and you become less flexible. (to price higher in the current boom)

Since there are enough jobs going around in the market, we should not be entering into this arena. The good thing for those major contractors is that they have clear order books for six to eight years. But since there’s enough to go around, we select shorter duration projects. So I can recycle my capital a lot faster than the others.

(Earlier interviews cover Mr. Or’s exceptional focus on project management excellence which he is very modest about but is a key advantage for OKP )

Q: With oil prices rising, are you exposed to higher input costs?

A: Because of the nature of our work, we don’t use much diesel. My consumption is about 200,000 liters per month for the whole group, which is very, very little. Diesel has gone from about $1.00 to $2.30, so every month I have an extra cost. Assuming it persists, the annual impact would be maybe 2-3 mSGD. Based on my turnover and my gross margins, I don’t think that is significant.

For reference, the largest earthworks contractor in Singapore, KTC (a private firm) consumes 5 million liters per month. A dollar increase costs them 5 mSGD. We are in a very different position.

For materials, concrete and reinforcement steel in my contracts have fluctuation clauses, so I’m covered. The structural steel we use has increased about $100 per ton, but the suppliers and subcontractors are still honoring their contracted rates.

For labor, cost increases are limited and focused on white collar workers, more driven by the construction boom rather than cost of living increases.

Q: What is your biggest challenge right now?

A: Human resources. Everybody is poaching engineers from one another. If you don’t have a strong enough project management team to execute your work, you run into problems. Project delivery is not there, productivity is not there, and risk management and cost management may not be as efficient.

The challenge for cycling paths and sheltered linkways is that there are a lot of stakeholders to deal with. You are working in proximity to residential housing. You deal with trees governed by NParks, drains governed by PUB, and so on. The good thing is that my team has been doing this for the past five to six years. Their experience allows them to tackle all these challenges. It’s not easy for newcomers to come in and just get a contract awarded.

Q: You mentioned that you always strive to improve. Is your team bigger than a year ago?

A: Right now, the whole group has close to 800 general workers. But the management and project management team has grown by about 12 to 15 percent. We are growing, but we are selective. We really look for quality people.

I have also just recruited two new senior engineers who are experts in large-scale tenders. Their main role is to participate in tenders and technical submissions for more complex jobs of 300 to 400 mSGD.

Q: What about the AM208 tender? It has been taking a while.

A: You are very well informed. Even the local analysts don’t know the tender number, haha. AM208 has not been awarded yet, but I think we may face some competition on price there from a Chinese competitor.

I believe my technical submission should score a lot higher, but with 70% of the scoring on price and 30% on technical, I’m not sure my overall score will overcome their pricing.

Q: How much are you tendering for right now?

A: The total value of tenders we have already submitted is about 600 mSGD. There’s another 600 to 700 mSGD in tenders still being prepared. So in total, about 1.3 bSGD.

We just announced the 87 mSGD contract for commuter infrastructure around the Jurong Region Line. This contract has options that will likely grow it beyond 100 million. Besides that win, I hope I can deliver some good news within the next three to four months.

Q: Based on the projects in the pipeline, how many good years do you see ahead?

A: Based on the near future, 2026, 2027, 2028 and 2029, I think these three to four years are going to be fantastic. Beyond that, it’s too far to predict, because you don’t know what changes may come.

Q: Let’s talk about the cash position. It’s grown significantly because of your profitability. How do you think about it? I know you get this question all the time.

A: The reason we are careful with dividends: Some of the jobs I tender for may require heavy upfront cash to purchase sheet piles and temporary structures before the work even begins.

The cash gives us the ability to bid on larger projects. And when clients award contracts, they look at your financial statements. They have become more vigilant since the pandemic, when a lot of contractors went bust.

If one day there is no more growth and the supply of work dries up, I will give huge dividends. But right now, we are still growing.

---

Thoughts on the interview

I no longer own OKP, but clearly the company is still cheap at < 10x earnings, continues growing double digits, while expanding their orderbook by bidding on larger projects. This is one of the best managed companies in the industry.

Surprisingly, the outlook is that the ongoing conflict in Iran will not affect their large margins that much. They will be able to manage costs even if oil remains high, because they don’t consume much oil, and because their key inputs (concrete and construction steel) are bought on long term contracts matching their typical 1-2 year project durations.

When Mr. Or. talks about inflation, we can understand that the impact on companies like OKP (and for example Soilbuild), will be limited as they don’t use much oil or have short (1-2 yrs) project durations.

I think KTC/Huationg will be much more affected. These companies have lower margins to begin with, consume high amounts of fuel, and have multi-year backlogs creating a perfect storm. I would not be surprised though, if they end up making deals to raise prices. The current construction boom in Singapore is so strong, that its unlikely for these companies not to make good money one way or another. Time will tell. H1 2026 might be difficult for these companies.

I think Lincotrade, similar to OKP will not see much negative impact from higher oil, but for a different reason: Their outfitting work requires no earthworks at all. I think their demand is also a bit more price-elastic (data centers or hospitals/hotels needing the final utility and outfitting works before opening).