KUALA LUMPUR (May 31): Hong Leong Investment Bank (HLIB) Research has maintained its 'buy' rating for OSK Holdings Bhd (KL:OSK) at RM1.66, with a higher target price of RM2.21 (from RM2.16), and said OSK’s first-quarter core profit after tax and minority interest of RM122.8 million (+26.7% quarter-on-quarter; +6.4% year-on-year) was within house expectations, making up 26.4% of HLIB's full-year forecast.

In a note on Friday, the research house said the group is on track to record another year of solid growth anchored by property development from better progress billings and project cost savings, capital financing from a growing loan portfolio, and better economies of scale and industries from growing demand for cables and the industrialised building system (IBS).

“Its associate RHB is also expected to deliver a stable performance, given an improving capital market from the realisation of investment activities.

“We maintain our forecasts and 'buy' call, with a higher target price of RM2.21 (from RM2.16), based on a 30% discount to our sum-of-parts-derived valuation of RM3.06.

“The stock is poised for further rerating, given its exposure to key growth areas, including capital financing, property development, cables and the IBS,” the research house said.

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