An Underrated "Win-Win" Counter on Vaccine & Gloves

In our current stock market, we all have the common understanding that gloves always go the opposite way of vaccine. For example, when Pfizer or Moderna comes up with any kind of update on the status of the vaccine, it is very likely for glove counter to drop in share price, and vice versa.

So, as an investor, we do not want to bet against the roller coaster of “good news” that are jumping around in the market. We would want a secured, and educated guess on which stock we should invest into for the Win-Win” situation, whom can benefit from both side’s good news, isn’t it?

Now, after spending weeks of analysing the glove sector, I found that most if not all glove counters are subjected to a drop when any “good news” in vaccine surfaced. But fundamentally, not this company.

And this particular counter would be – VIZIONE HOLDINGS BERHAD (7070)!

If you had been investing in the stock market for some time, you’ve probably heard of VIZIONE. Ever since the election carried out in FY 2018, the stock price for VIZIONE had been hammered down from RM 1.220 – RM 1.230 all the way down to the current price of RM 0.420. To me, it is a substantial drop in price.

But is it a substantial drop in value? I do not think so. Despite the company suffered 2 quarters of losses as a result of COVID-19 pandemic, one can still see that the company have a strong balance sheet of minimal bank borrowings. The company is currently trading at 2.46 times of price-to-book ratio, in other words, VIZIONE’s NTA currently is standing at an impressive 1.0322 per share level!

Based on our understanding, VIZIONE’s core business was involved in the construction of low-cost properties (government projects), infrastructure works as well as some private commercial projects. They were also involved in property developing projects, but I think as of now, the bread and butter would be construction side.

Hence, there is a thematic play where VIZIONE’s sector will recover post COVID-19. In fact, there are several construction stocks that already recovered since their low.

But what about the glove side? What if COVID-19 is back? This is the fun part. As we know, every small players like AT could spike in terms of price and volume, in which they have no financial buffer should the business went south. However, This company actually inked a deal with SSN Medical Sdn. Bhd. to buy 51% of their stakes. This medical company is currently producing up to 500 million pieces of gloves and 150 million pieces of condom per annum!

If COVID-19 returns, I believe VIZIONE still could profit from their newly emerged glove sector. Hence why I call this counter as a “Win-Win” play for investor.

As of the time of writing this, although we see some selling pressure still on VIZIONE, but I firmly believe that these are the fund house that are stuck in the company since buying from RM 0.800 – RM 1.000 range, as the seller queue is minimal but the volume is huge.

Once these fund houses are out of the company, I can assure you, VIVOCOM could recover to half of its peak!