In terms of top line performance, things doesn't look that bad. Revenue had in fact grown by about 20% to $128m. But as we look closer at its profit, we realise that its profit margin has shrunk close to 250% from 17.4% to 6.9%. Gross profit is but $12.5m, down from $23m a year ago. EPS is down to 1.6c from 4c previously. DPS is down to 0.3c from 1.5c.
In terms of overall balance sheet, I think the company is still fundamentally sound with a debt to equity ratio of about 2.8%. It's still net cash if we look at its cash holdings. Hence on the whole I'm not too bothered by its overall financial status.
I think the doldrums that OKP is currently in is mainly due to the rising manpower costs eroding a large part of their margins. This is further worsened by the large order books that the company has previously committed. Moving forward, it would hopefully get better as they are able to factor in the increased cost into their new contracts.
Will I buy more to average down? Maybe. Since the stock is currently trading at close to its NAV of 30c per share. I'm not totally satisfied by its meagre dividend yield of about 1% currently. I will likely monitor for awhile before deciding on whether to add more to my existing holdings.