Read This Before Investing In OTS Holdings (SGX:OTS)

OTS holdings, a company which primary business is manufacturing and distributing ready-to-eat and ready-to-cook meat products, recently completed it’s IPO on the 17th of June 2021. The company now has a post-IPO share capital of 214 million shares, and a share price of S$0.34 as at 30th of June. This translates into a market capitalization of S$71.72m in total.

Could this counter be a potential multi-bagger? Or would it go south after an exciting IPO? let’s take a look at it’s fundamentals and business model to determine it’s value before we buy into the stock.

Business Model

OTS holdings is primarily in the business of manufacturing and distributing processed meat products to distributors in Asia and around the world. These products include items such as luncheon meat, sausages, meat floss, bacon, hams, cold cuts, and meat jerky (bak kwa). They cater to both the halal and non-halal markets. 

The company has it’s manufacturing facilities in Singapore and also Indonesia, although most of it’s products are manufactured in Singapore. The company sells it’s products under their own brand names, such as Golden Bridge, Kelly’s, and El-dina, which are their brands targeting the general public through supermarkets and provision shops. The company also owns brands which are catered towards food service customers in the food industry.

The company’s business model involves the purchase of raw ingredients in bulk, and through a value adding process, results in the production of ready-to-eat and ready-to-cook meat products which generally carry a higher profit margin than raw meat. This means that the business can be possibly greatly affected by the prices of raw materials, which would affect it’s base costs and profit margins.

Although OTS holdings has business operations around the world, they still derive most of their revenue from Singapore (58.2%) and Malaysia (35.6%). The remainder comes from various other countries (6.2%).

OTS holding’s variety of brands


Looking at the IPO’s prospectus, we can see that the company’s full year revenues have been increasing, from S$23m in 2018, to S$26m in 2019. However revenue surged in 2020, jumping to S$34m, which compared to FY2018 revenue, is an increase of almost 50% of full year revenue, most likely due to the effects of stockpiling during the pandemic.

Net profit margins have been relatively steady, at 6% in 2018 and 2019, but shot up to 10.3% for FY2020 results. With a sudden surge in demand, they would be able to reduce promotions, and set higher prices for their products, this could be causing the increase in net profit margins. However, over time demand should stabilize to more normal levels.

The company has a Net Asset Value of 11.19 cents, as well as cash equivalents of S$5m. They also have available credit facilities of S$17m in total, of which S$7.8m have been utilised.

If we use full year 2020 revenues of S$34.5m, earnings per share of 1.66 cents for FY2020, and at a share price of S$0.34, we would be buying this stock at a Price-to-Earnings ratio of 20 and Price-to-Sales ratio of 2.1, a slightly expensive price in my opinion.

Commonly found in supermarkets in Singapore, the Kelly’s brand is meant to cater to consumers with a preference for western meats and deli.


While OTS holdings used to sell mainly to distributors and middlemen such as major supermarkets, convenience stores, hotels, hawker centers, and food courts, they have also branched out into online retail, selling directly to customers through platforms such as Shopee. They are also looking to expand their manufacturing operations in Indonesia, and are looking to expand in the Philippines as well. If OTS holdings manages to execute well on these ideas, it could cause a re-rating of their share price.

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