OSK Berhad is now trading at 10 years low considering its current PE and PB ratio. Is this a buy stock? I provided my evaluation in the blog link below

https://jyinvesting.com/osk-holdings-berhad-klse-osk/

This is a property group with an interest in the financial services sector. This may be why its average ROE from 2011 to 2022 was 10% compared to the mean ROE of the large Bursa property companies (those with SHF > RM 1b) that averaged 7%. The Bursa companies had a tough decade as per Will the Malaysian Property industry turn around by 2024?  

But the property sector is turning around and I would expect better performance from OSK

OSK Holdings carried out a corporate exercise in 2014, to merge PJ Development Holdings Berhad  and OSK Property Holdings Berhad into the group. Effectively OSK Holdings is now a property counter with property development & construction, investment properties and some manufacturing as it main operations.

But is this really the case? When you look at its profit profile as shown in the chart, you will find that the bigger contributor over the past 9 years was not from its operations. The non-operating segment - its investments in RHB bank - accounted for a bigger part of its profits.

So, is this a property company or something else? If you are thinking of investing in OSK, shouldn’t you be looking at the performance of the Malaysian banking sector rather than the property sector?

OSK – will we see a profit boost?

Over the past 8 years, OSK has transformed itself from a financial services company to a property group although financial services still accounted for more than half of the net assets.

Because of this set-up, while OSK's main operation is property development, a big part of the profits still came from its investment in RHB. The Malaysian property market had been soft for many years, but there are signs of recovery. Hopefully we will then have both cylinders firing thereby boosting OSK performance.

For more insights go to page 20 of INVEST