KUALA LUMPUR (Sept 9): OCK Group Bhd’s (KL:OCK) proposed listing of its 52%-owned energy solutions subsidiary, EI Power Technologies (EIPT), on the ACE Market of Bursa Malaysia via its new listing vehicle, EI Power Bhd (EIP), will increase visibility and highlight its true market value, analysts said.
Phillip Capital noted that the separate listing could help OCK “crystallise” the value of its power engineering business, strengthen its capital base for expansion, and be better positioned to grow in regional markets like Thailand.
“While initial public offering (IPO) valuation is pending regulatory and shareholder approvals, solar and renewable peers under our coverage are trading at 16-21 times forward price-earnings.
"Depending on the eventual listing multiple, the exercise could serve as a value-unlocking catalyst, as OCK is currently trading at nine times its forecasted earnings for the financial year ending June 30, 2026 (FY2026),” Phillip Capital said in a note. It maintained its ‘buy’ call on the stock with a target price of 66 sen.
The house noted that in FY2024, EIP accounted for 4% of OCK's revenue and 14% of net profit.
Post-listing, with OCK retaining an effective 37.2% stake, the group’s earnings are expected to decline by 3%, reflecting the reduction from its current 52% holding, the house added.
Separately, Kenanga Research said the separate listing will shed light on EIPT’s value while providing a transparent, market-based valuation benchmark — enhancing OCK’s profile.
"We estimate the implied value of OCK’s post-IPO stake in EIP could reach up to RM58 million — representing 2.2 times of our current valuation for EIPT, and about 14% of our current target price," it added.
Kenanga also highlighted that EIP’s growth could accelerate with equity funding, as the listing enables the company to raise fresh capital through share issuance.
However, Kenanga flagged earnings dilution as a key risk given that OCK’s effective stake in EIP will fall to 37.2% post-IPO, from 52% in EIPT.
Prior to the listing, the group’s new listing vehicle, EIP, will acquire all of EIPT’s shares from OCK and two other shareholders for RM9.47 million, to be satisfied via the issuance of 570.5 million new EIP shares at RM1.66 sen apiece, according to a filing on Monday.
EIP plans to launch an IPO comprising a public issue of 129.5 million new shares and an offer for sale of 70 million existing shares, representing a combined 28.5% of the enlarged share capital.
Kenanga noted that the proposed transactions and IPO are targeted for completion by the second quarter of 2026, subject to approvals from Bursa Securities, the Securities Commission Malaysia, and OCK’s shareholders at an extraordinary general meeting.
The IPO proceeds will be for the acquisition and setup of a new headquarters cum warehouse, installation of building energy efficiency systems (BEES) for clients, and new branches in Thailand and Johor, purchase of materials as well as working capital requirements.
Kenanga kept its 'market perform' call on OCK with a target price of 39 sen.
According to Bloomberg data, of the four analysts covering OCK, three have ‘buy’ calls and one has a ‘hold’.
At the time of writing on Tuesday, OCK’s share price had inched up half a sen to 41.5 sen from Monday’s close of 41 sen, giving the group a market capitalisation of RM436.2 million.