A “hold” call has been placed on OKP Holdings Ltd with a target price of S$0.39 by KGI Research.
In a report on Monday, KGI said that the collapse of an uncompleted viaduct near the Pan-Island Expressway on July 14 is likely to hurt OKP’s earnings and dividends.
The construction firm called a trading halt last Friday morning after the accident at the worksite of its subsidiary Or Kim Peow Contractors claimed the life of one worker and injured 10 others. When trading resumed Monday morning, OKP saw its stock price plunge nearly 14 per cent.
KGI’s report said: “Ongoing works on the project have been put on hold, and this has dampened our expectations of topline growth this year. A possible impairment charge due to the viaduct collapse is likely to further hurt FY17F earnings and dividends.
Market voices on:
“OKP was previously penalised for a safety lapse that had led to another worker’s death in 2015, and was debarred from employing new workers for a period of three months (Jan 5 to Apr 4, 2017). Coupled with the pending investigation of this latest workplace safety breach, this could affect OKP’s chances of winning major upcoming public road construction projects as safety records could be taken into consideration in the tender process,” it added.
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