This Company Surged 10X From Penny Stock to Market Star -- and 40+ PE

THE CONTEXT

• Oiltek International has enjoyed a jaw-dropping 10X surge in its stock price (from just 10 cents in May 2024 to $1.01 recently).

That's a surprise, given how technical its business is, not to mention that it's a Malaysian company on the Singapore Exchange, where it listed in March 2022.

• The rally isn't without reason -- Oiltek has delivered solid growth in earnings and orderbook. But let's be clear -- the stock is anything but undervalued.

• Phillip Securities, UOB Kay Hian and CGS International have been covering the stock with optimism, and now comes Evolve Capital Advisory, which is more of a financial advisory firm and not a traditional broker.

Its initiation report has a target price of $1.22, which is slightly above Phillips' ($1.18), CGS' ($1.02) and UOB KH's ($1.05).

Oiltek is forecast to achieve RM35.3 million in net profit in 2025 by Evolve Capital.

• Oiltek provides turnkey solutions for refineries and processing plants in the vegetable oils industry.

While it has customers all over the world (including Wilmar, Sime Darby and Sinar Mas), Indonesia's players in the palm oil supply chain accounted for 78% of its FY23 revenue.

• Evolve Capital highlights Oiltek’s asset-light model.

By billing clients in stages —10-30% upfront, 40-60% on delivery 7-8 months later, and the balance at commissioning — Oiltek maintains a rare negative working capital cycle of about 40 days. This has enabled its business to grow without taking on debt.

• That said, the stock needs a pullback or consolidation given its trailing PE is north of 40.

For more, see excerpts of Evolve Capital's report below...

Excerpts from Evolve Capital report
Analyst: Ethan Aw

Asset-light and well positioned for growth

Investment Highlights
• We initiate coverage on Oiltek with a BUY rating and a DCF-based TP of S$1.22, which implies a FY26E P/E of 40.7x and an upside of 20.8%.

Oiltek
Share price: $1.01	Target: $1.22

Although its multiples are at a premium to that of regional edible oil peers, we view this as justified by its structurally superior ROE (FY24: 35.2%), capital-efficient model, strong order book visibility and robust growth.

The business is also highly scalable, as fabrication is primarily outsourced, allowing Oiltek to focus on project management and execution.

More importantly, new contract wins can drive outperformance without the need for incremental capex.

• Asset-light model and low CAPEX needs. Oiltek operates an asset-light business model by specializing in the design, engineering, and sale of processing plants for edible and non-edible oil processing, rather than operating its own manufacturing facilities.

The company prepares all engineering and fabrication drawings, with components manufactured by third-party fabricators according to specifications provided by its clients. Hence, their key differentiated offering lies in their technical expertise and know-how.

• Growing orderbook with high forward revenue visibility. Since listing, the firm’s order book has consistently been on the rise, having more than doubled and reaching a peak of MYR430.9m in Jul 2024.

With projects typically completed within 18 to 24 months, this also provides solid forward revenue visibility. As of Aug 2025, its order book remained robust at MYR398.5m.

Stock price	$1.01
52-wk range	16.5 c – $1.16
Market cap	S$433 m
PE (trailing)	43
Dividend yield (trailing)	1.38%
1-year return	494%
Shares outstanding	429 m
Source: Yahoo!

Looking ahead, we expect initiatives in Indonesia and Malaysia to drive the next leg of growth for its renewable energy segment, though revenue growth is likely only to accelerate from FY27E onwards given project lead times of 18-24 months.

Per our estimates, we expect revenue growth to be approximately 17.1% in FY25E and 6% in FY26E, before reaccelerating to 11.7% YoY in FY27E.

• Strong net cash position supported by negative working capital cycle. Historically, Oiltek’s asset-light model has enabled it to fund growth without borrowings, allowing the company to steadily build its cash reserves, which stood at MYR111.7m as of 1H25.

Full report here.

This Company Surged 10X From Penny Stock to Market Star -- and 40+ PE

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