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It was a most unusual transaction: Oiltek International CEO Henry Yong swapped part of his Oiltek shareholding for units in a fund.
The Fund did not portray the acquisition as a passive investment at all. Richard Chee, adviser to the Fund, went further, in the announcement:
That is quite a bold prediction. |
| More than a new shareholder |
The Global SAF and Energy Fund, which was set up a few months ago, has a mandate to invest in companies, projects and assets across the SAF and clean-energy value chain, particularly in Asia-Pacific.
More interestingly, the Fund sees strategic alignment between its regional SAF project pipeline and Oiltek’s engineering expertise.
| Oiltek in tandem with Fund |
| "As the Fund develops and co-develops SAF and clean energy projects across Asia-Pacific, Oiltek's integrated process technology expertise, spanning feedstock pretreatment, oil refining, HVO, biodiesel, and biogas, positions it as a potential value proposition within the Fund's portfolio. This creates a potential pathway for Oiltek to expand its project footprint in tandem with the Fund's investment activities in the region." -- Sky Ventures Capital, adviser to the Fund |
Oiltek has capabilities spanning feedstock pretreatment, oil refining, HVO, biodiesel and biogas.
This potentially creates a pathway for Oiltek to participate as the Fund develops and co-develops SAF and clean-energy projects.
The Fund has already said it is looking into investing in Sarawak for SAF development.
Phillip Securities' 4 September report, headlined “Pricing a delay, but underlying trend intact,” said the Fund could become an “important partner” in financing future SAF projects.
Describing Oiltek as “building the foundation to pivot” Phillip head of research Paul Chew said:
"Oiltek is building strategic partnerships to target SAF projects in the region. It includes technology licensing from Europe and financing collaboration with the Global SAF and Energy Fund. Apart from SAF, other renewable opportunities are BioCNG and animal feed."
| The big SAF earnings have been delayed |
For now, Oiltek’s biggest potential catalyst remains the proposed US$350 million BioSeaga SAF project in Sabah.
Paul says the project continues to progress through planned milestones, including land acquisition. But he has become substantially more cautious about when Oiltek will actually book the earnings.
He has removed all assumed Sabah SAF revenue from FY2026 and applied a 30% discount to planned SAF billing for FY2027.
Consequently, he cut its FY2026 and FY2027 PATMI forecasts by 34% and 24% respectively, while reducing its target price from S$2.72 to S$2.00.
|
Key Financials |
FY24 |
FY25 |
FY26e |
FY27e |
|
Revenue (RM mn) |
230 |
211 |
213 |
685 |
|
EBITDA (RM mn) |
36.9 |
47.6 |
41.1 |
147.7 |
|
Adj. Net Profit (RM mn) |
28.3 |
36.1 |
33.0 |
113.6 |
|
EPS (SGD cents) |
2.0 |
2.7 |
2.4 |
8.3 |
|
P/E (x) |
68.1 |
50.5 |
56.1 |
16.3 |
|
Dividend Yield |
0.7% |
0.9% |
1.0% |
3.7% |
|
ROE |
39.0% |
34.7% |
29.0% |
62.6% |
|
ROA |
14.8% |
15.8% |
16.7% |
37.4% |
Source: Phillip Securities
Despite those cuts, his FY2027 numbers still imply a dramatic transformation: revenue is forecast to rise from RM213 million in FY2026 to RM685 million, while adjusted net profit jumps from RM33 million to RM113.6 million.
Oiltek’s existing business has meanwhile softened.
That makes the Fund transaction especially interesting. The investment case is no longer simply whether Oiltek can win one giant SAF contract. |
→ See also: OILTEK Has the Pipeline. Next Rerating Hinges on Inking Contracts
