The disparity in value was big enough for certain shareholders to take action more than a year ago. Ahead of KBG’s annual general meeting last year, the company received a requisition notice from shareholders Morph Investment, Ong Sze Wang and Chin Phak Lin, asking for the distribution of Oiltek shares in specie via KBE to be put to the vote.
Oiltek International, which was listed with hardly any fanfare in March 2022, has seen an almost meteoric rise in its share price, gaining more than 2,500% since its IPO to close at $2.12 on April 14. Buoyed by a growing chorus of bullish target prices — the latest being CGS International’s $3.38 call on April 14 — the surge in Oiltek’s value has highlighted the unprecedented mismatch at its parent and “grandparent” company Koh Brothers Eco Engineering (KBE) and Koh Brothers Group (KBG), respectively.
Oiltek is 68.1% controlled by KBE, and the stake is valued at $619 million as of April 14, versus KBE’s entire market cap of $331.9 million. Meanwhile, KBE is 54.8% held by KBG — a stake valued at $181.9 million, versus KBG’s total market cap of just $148.9 million. KBG’s effective stake in Oiltek is $339.2 million, or twice its own market cap. The contrast is even starker amid a revival in investor interest in construction stocks — and not just continued optimism in local equities.
