OSK's entry into motorcycle financing offers fresh growth, says HLIB

New Straits Times

16 hours ago

KUALA LUMPUR: OSK Holdings Bhd's move into motorcycle financing opens up a new growth opportunity in an expanding market while helping diversify its risk across various customer segments.
According to Hong Leong Investment Bank (HLIB), OSK is not entering the segment from scratch and the acquisition of Wilayah Credit provides a faster entry, as the company already has strong dealer networks and operational expertise.
HLIB said it also comes with a valuable customer database and credit behaviour insights, which OSK can leverage across its broader financing ecosystem.
"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," it said.
HLIB noted that OSK has agreed to acquire Wilayah Credit for RM16.5 million, a sum that is around RM300,000 higher than its net assets of RM16.2 million, translating to a premium of roughly 7.7 per cent after factoring in the disposal of shop lots.
The research firm said the premium is justified, as the real value of the acquisition goes beyond physical assets.
It includes intangible advantages such as a robust customer database, long-standing dealer relationships, and a solid market presence, which are not reflected in the balance sheet.
"While the acquisition is modest in size, it reflects OSK's proactive approach to managing and diversifying its risk," the firm said.
HLIB has reiterated its 'Buy' recommendation on OSK, keeping the target price unchanged at RM2.00.
The firm highlighted OSK's attractive multi-engine growth story, driven by the rapid expansion of its private credit segment, which has recorded a strong five-year compound annual growth rate (CAGR) of 24.8 per cent and is becoming a major contributor to the group's overall growth.