Business Background

• OKA Corporation Berhad is an investment holding company, founded in 1981 and is headquartered in Ipoh, Malaysia.
• The company is engaged in the manufacture and sale of pre-cast concrete products and ready mixed concrete.
• It also provides construction and related services, and transportation and other related services.
• All of its products are used in the drainage, sewerage, buildings, and water related infrastructure works.

Board of Directors

• Ong Koon Ann
  • Founder of OKA
  • Group Managing Director
  • Malaysian, Age 71 (2015)
  • Holding 50.51% (FY15)

• Quah Seok Keng
  • Spouse of Ong Koon Ann
  • Executive Director
  • Singaporean, Age 68 (2015)
  • Holding 4.58% (FY15)

• Ong Choo Ian
  • Son of Ong Koon Ann and Quah Seok Keng
  • Executive Director
  • Malaysian, Age 38 (2015)
  • Holding 2.16% (FY15)

Factories

Financial Overview

• Revenue increase year by year in an average of 10% since FY06, from RM58m (FY06) to RM163m (FY15).
• Net profit jumped more than double in FY14 to RM13,382,000 from RM5,675,000 in FY13.

• Dividend remain constant at the range of 3 to 4 sen since FY04.

• The Group has turned net cash in FY15 for the first time in 10 years.

SWOT

Strengths

• Revenue has been increasing steadily at least for the past 10 years.
• Family business. Good management lead to higher profit margin in comparison with peers.
• Net cash company. Well prepared for the worst during difficult times like now.

Weaknesses

• Founder Ong Koon Ann is 71 years old (2015).

Opportunities

• Mega projects by government ahead of 2016 and 2017, this will increase the revenue of OKA.
• Such as WCE, Pan-Borneo Express, Rapid and more.

Threats

• Uncertainties in raw materials pricing.
• The effect of the implementation of GST in 2015.
• Cancellation of projects as crude oil prices remain low

Conclusions

OKA Corporation Bhd is a company with good financial and management. The financial part is pretty obvious, revenue and profit going up while debt going down. A higher profit margin in comparison with peers is most likely due to good management. On top of that, it is a family business which is always a plus in my opinion.

According to the articles of OKA, directors who are of or over the age of seventy (70) years shall retire at the conclusion of the next AGM unless they are re-appointed. The founder Ong Koon Ann is 71 years old this year, if for some reasons he was not re-appointed, a revision should be done asap. On the other hand, prospect from the chairman seems promising for the future but only results can back their words, let’s just sit back and wait for it.

Although OKA is growing at a slow pace, history shows that slow and steady win the race. Warren Buffett once said “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” This my friend, is definitely one of those stocks to hold for 10 years without much worries.

P.S. I know everyone is looking for stocks that benefit from the strengthening of USD as MYR remains weak, but let's not forget the undervalued stocks for long term.

Source:https://stockhuat.wordpress.com/2015/12/20/oka-7140/