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Dear Investors,

Thank you very much for the questions and the opportunities to clarify them. We hope you have a better understanding of our business through this online exchange.

Your questions will be reposted in blue followed by our replies in black.

Rgds,
The Management Team
OKP Holdings Ltd

Dear Lim Boon Song, you wrote:

I have noted an improvement in margins from 2H 2022 compared to 1H 2022. Could I ask if this is attributed more to new ongoing projects or existing projects completion? What is the management's internal estimates of the margins of its existing orderbook? Will it be better than 2022/ similar to 2022 or 2021 levels?

The improvement in margins for 2H2022 as compared to 1H2022 was attributable to both new and ongoing projects.

Looking ahead, we will continue to focus on operational efficiencies to better manage margins. We will embrace technology and innovation, enhance and upscale our workforce, as well as boost the implementation of equipment and tools to scale down on the reliance on manpower to raise our productivity and the Group's competitive edge. We will also focus on ongoing cost containment measures in light of ongoing inflationary pressures, to better manage our margins.

I understand that arbitration cost the company $3.6m. It is noted that the company was fined (of a million) and made a settlement of undisclosed amount to LTA over the course of this entire episode. What is the current status of the arbitration?

Hearings for the arbitration have concluded in September 2022 and the Company will make further announcements in the event of any material developments in relation to the arbitration proceedings.

Would there be any other recourse if the outcome of the arbitration does not meet the expectations?

The outcome of the arbitration will be final and there will be no further recourse.

Has the arbitration process affected or will possibly affect the working relationship with any of the companies' partners?

The arbitration proceedings have no impact on our working relationship with the Company's other business partners, and we will continue to work with partners with the relevant experience.

Given the weakening office property market and rising interest cost, as well as the lowering cash position, what is the company's plan with the three recently acquired investment properties acquired in 2021? (Kreta Ayer & Kampong Bahru)? Would there be further cost expected to rejuvenate or renovate the properties?

These investment properties are intended to boost our recurring income and provide opportunities for capital gains. These properties are in good conditions and from time to time, we will look into minor enhancements based on feedback from tenants.

Could the management guide on the breakdown of rental collected from the local properties? The figure quoted $0.695m collected in local properties FY22.

We are unable to furnish the breakdown of rental collected from the various local properties as the disclosure of such information will affect the valuation of those properties.

Would the company expect the margin of the new contract wins to be similar to those of the last two years or better?

The Company will manage our margins by:

  1. continuing to focus on operational efficiencies;
  2. embracing technology and innovation, enhance and upscale our workforce, as well as boost the implementation of equipment and tools to scale down on the reliance on manpower;
  3. raising our productivity and the Group's competitive edge;
  4. focusing on ongoing cost containment measures in light of ongoing inflationary pressures; and
  5. having an effective tender management process by estimating accurately the pricing for a tender.

Dear Ryan Leong, you wrote:

When you acquire overseas properties, do you hedge against currency risk by borrowing in the same currency to fund the acquisition?

All borrowings are in the same currency as the acquisition consideration, which gives rise to a natural hedge as all our cash inflows and outflows are in the same currency.

Dear Alvin Ng, you wrote:

Do you lease out your equipment like crawler crane and excavator when they are idle? Have you considered starting a leasing company to lease out construction related vehicles?

At this point of time, all our equipment are operating at their optimal capacities.

There are no plans to set-up a leasing company for now and we will stay focused on our core business in civil engineering.

Dear Timothy Chan, you wrote:

Do you plan to grow your property portfolio organically or raise capital to speed it up?

We will continue to explore strategic partnerships with potential partners for our property development and investment business when market opportunities arise.

We have no intention to raise capital to speed up the growth of our property portfolio at this juncture.

Dear Investors,

Thank you for all your questions and the interest in OKP Holdings Ltd. We have come to the end of this Q&A session.

We have enjoyed and learnt much from your questions and we hope that you have a better insight of our Company and know more about our operations.

Rgds,
The Management Team
OKP Holdings Ltd.