PETALING JAYA: OSK Holdings Bhd
has gained a fast-track exposure into the motorcycle financing business via its proposed acquisition of Wilayah Credit Sdn Bhd for RM16.5mil, which is slated for completion in the third quarter of 2025.
Hong Leong Investment Bank (HLIB) Research in a report said the acquisition will offer the group access to a new growth avenue in a resilient and growing market as well as diversification of risk across different customer segments.
The acquisition also marks OSK’s entry into its second consumer financing product, alongside its existing civil servant financing business.
Wilayah Credit is an established player with dealer relationships and operational know-how and has a valuable database of customers and credit behaviour, which can be leveraged across OSK’s financing ecosystem, said the research house in a report yesterday.
“With OSK’s strong treasury team and ability to secure competitive funding, there is potential to scale up the loan portfolio more effectively post-acquisition,” HLIB Research added.
Upon completion, OSK will sell three shoplots, which are currently occupied by Wilayah Credit, back to the latter for RM12.6mil, equivalent to the book value of the properties.
Since OSK does not require these assets, disposing of them back effectively lowers the net purchase price of Wilayah Credit to RM3.9mil.
HLIB Research noted that “the agreed purchase price for Wilayah Credit at RM16.5mil is approximately RM300,000 above its net assets of RM16.2mil, representing a premium of about 7.7% after accounting for the disposal of the shop lots.
“We believe this premium is reasonable, as the true value of the acquisition lies not only in the tangible assets but also in the intangible benefits, particularly the customer database, established dealer relationships, and market presence, which are not captured on the balance sheet.”
While the acquisition is modest in size, the research house said it reflects OSK’s proactive approach to managing and diversifying its risk.
By expanding into motorcycle financing, OSK is spreading its exposure across different customer bases and economic drivers.
It also signals the management’s foresight in building a more balanced and robust financing portfolio.
HLIB Research said it has maintained its forecasts on OSK as “we expect the contribution from this segment to be immaterial in the near term”.
It has kept a “buy” call on the stock with an unchanged target price of RM2 per share.
“OSK offers a compelling multi-engine growth story, led by its fast-expanding private credit business, which has delivered an impressive five-year compounded annual growth rate of 24.8% and is emerging as a key growth pillar,” added the research house.
The group also provides unique exposure to the power infrastructure sector through its cable division, benefiting from rising demand from utilities, renewable energy players and mission-critical infra projects.
“Despite these strong growth drivers, the stock trades at an undemanding valuation, thus leaving ample room for re-rating,” it added.
