Is Vivocom to be Dragon in Construction Sector?

A)Introduction

B)Director's Profile

1)AR. LIM TONG HOCK-Chairman, Independent Non-Executive Director

A Malaysian and aged 62, Ar. Lim Tong Hock was appointed as an Independent Non-Executive Director and as the Chairman of the Board of Directors on 1 April 2015. He is also a member of the Nomination and Remuneration Committee of the Company.

Ar. Lim Tong Hock  began his training  as  assistant  architect in  1980 in the architects’  department of  Borough of  Haringey, London, after obtaining his Bachelor’s degree. Subsequently, he worked for Briffa Phillips Chartered Architects in London before returning to  Malaysia to join a private architectural  practice  in Kuala Lumpur in 1984. In 1990, he  obtained   his  corporate membership to practice as an architect  and set up his own practice  under the name of ADL Architect. He has vast experience in designing  and managing  projects   such  as   hotels, housing,  industrial  and  institutional   buildings. As at 31  December 2015, he did  not  hold ordinary  shares in the  Company. 

2)MS. ANNE KUNG SOO CHING-Chief Executive Officer, Executive Director

A Malaysian and aged 54, Anne was appointed to the Board as an Executive Director and Chief Executive Officer on 8 October 2012. She holds a Bachelor of Laws (Honours) Degree  from the London School of Economics and Political Science, University of  London. She  has been  called to  Lincolns Inn in  London and  the High  Court of Borneo in 1984. Prior to joining Instacom Engineering Sdn Bhd,  she  was the  Finance Director  of Quality  Concrete Sdn Bhd in  1992 before  assuming the position of Executive   Director in Quality Concrete  Holdings   Berhad   (the  listed  entity of   Quality  Concrete  Sdn  Bhd)  in  1996.  She   has served as the Treasurer of Sarawak Chamber of Commerce & Industry since 2007. She is a member of the SOCSO Appeal Board Member and Industrial Tribunal since 2004. In addition, she is also a member of the Malaysian Institute of Accountants and the Institute of Chartered Accountants in England & Wales. 

3)MR. CHOO SENG CHOON-Executive Director

A Malaysian and aged 42, Choo Seng Choon was appointed as an Independent Non-Executive Director on 7 September 2011. He was re-designated as an Executive Director on 15 May 2015. Choo Seng Choon is a Fellow Member of the Association of Chartered Certified Accountants, a Chartered Member of the Malaysian Institute of Accountants, a Chartered Member of the Institute of Internal Auditors, Malaysia and a Certified Internal Auditor. He also holds a Diploma in Financial Accounting from Tunku Abdul Rahman College, Kuala Lumpur. He has over 18 years of professional experience that includes internal audits,risk management, investigations, business management consulting, business process re-engineering, corporate governance advisory, due diligence, financial projections and financial audits.Choo Seng Choon is currently the Non-Executive Director of Audex Governance Sdn Bhd, a professional services firm that specialises in the provision of internal audit, risk management and management consulting services to a wide range of multinational and public listed conglomerate clients operating in the Asia Pacific Region. He also sits on the board of directors of EA Holdings Berhad where he also serves as the Chairman of the Audit and Risk Management Committee for EA Holdings Berhad. In addition, he also sits on the board of directors of several private limited companies.

4)DATO’ SERI DR. YEOH SEONG MOK- Joint Chief Executive Officer

A Malaysian and aged 60, Dato’ Seri Dr. Yeoh was appointed to as the Joint Chief Executive Officer on 2 Nov2015. He obtained his Bachelor’s Degree in Construction Management from Greenwich University, UK in 2000 and Master of Science Degree in Engineering  Business  Management from the  University of Warwick, UK in 2001. He also obtained his Doctorate Degree  in  Business  Administration in  Management  from  Greenwich  University,  Australia in 2002,  Doctorate  Degree in Business Administration in Project Management from Honolulu University, USA in 2002 and a Bachelor of Laws (LLB) Degree from the University of  London, UK in 2007. Dato’ Seri Dr. Yeoh is a  Project  Management  Professional  certified by the PMI and a  Certified  Financial Planner  accredited  by the  Financial Planning  Association of Malaysia,   a qualified Lead Assessor/   Auditor and Quality Management Systems, ISO 9000 by Alan A. Griffin Associates UK Ltd and Kualitas Services Ltd. Dato’ Seri Dr. Yeoh  has more  than 30 years of  experience  in managing projects. He had worked in various capacities  ranging from Project Manager to General Manager in various private companies and public listed companies such as Juma Construction Sdn Bhd, Astelle Construction Sdn Bhd, Suncon Berhad, Mancon Berhad, Anson Perdana Berhad and Pelangi Berhad. He was also the Chief Executive Officer for Pembinaan Aktif Gemilang Sdn Bhd.

C)Investment Subsidiaries

D)Financial Ratio for 2016 (TTM)

E)Quarterly Performance (2016 Vs 2015)

 F)Comparison of EPS for 2016 (TTM) Vs 2015

G)Construction Projects - Around RM2 Billion from 2016 to 2019

H)Cooperation With China Giant Company

1)On 7/12/15, Letter of Award (“LOA”) from CRCC Malaysia Berhad ("CRCC"), for the provision of construction works for a gated community housing scheme consisting of semi-d units, villa mansions, apartment block and housing units under the Rumah Selangorku scheme, in Bandar Ulu Klang, Daerah Gombak, Selangor Darul Ehsan  (“Project”). This Project is valued at Ringgit Malaysia One Hundred Sixteen Million and Four Hundred Thousand Only (RM116,400,000)

The LOA is subject to agreement to be entered into by Vivocom and CRCC. This Project is in addition to the contracts in hand of Neata Aluminium (Malaysia) Sdn Bhd and Vivocom (“Neata Group”) amounting to RM351.753 million and RM230.287 as disclosed in our circular dated 28 September 2015 and announcement dated 12 November 2015 respectively.This Project shall commence on 18 January 2016 and shall be completed within eighteen (18) months from the date of commencement. 

2)On 31/5/16, Letter of  cooperation intent between Zhonghe  Hauxing Development (M) Sdn Bhd and Vivocom Enterprise Sdn Bhd. Zhonghe Huaxing is a subsidiary company of China Nuclear Industry Huaxing Construction Company Limited, which in turn is controlled by China Nuclear Engineering Group Corporation, a conglomerate with expertise in the construction of military and civil infrastructures as well as commercial development, both in China and abroad. China Nuclear Engineering Group Corporation is a state owned enterprise held by the central government of China.

http://www.theedgemarkets.com/my/article/rm89-bil-gemas-jb-double-tracking-project-spin-jobs-locals

The Edge news on 20/2/17, A quick check with Bursa Malaysia reveals that local players that have tied up with CCCC, CRCC and CREC include George Kent (M) Bhd, Econpile Holdings Bhd and Vivocom International Holdings Bhd.

I)Rumours & Possible Market Abuses

1)On 27/6/16, Theedge : .. May be see the earlier retirement of Dato Seri Dr. Yeoh Seong Mok.

2)In the incident, CIMB Research made available online a report on Vivocom a day before the construction outfit actually released its latest quarterly results on Bursa Malaysia, with its financial numbers almost identical to Vivocom’s latest quarterly results. However, the report was quickly removed from public viewing, but not before some investors saw it.

J)Analysis

1)Is the Company big growth after joined of AR. LIM TONG HOCK as the Company Chairman?

2)Is the rumours of resignation or retirement of DATO’ SERI DR. YEOH SEONG MOK (who also work very closed with

  China Giant Company) clear ?

3)Is the Vivocom classified as company involves in Market abuse?

If the good things become BEST and the BAD things DISAPPEAR, 

a)should we start consider to invest in Vivocom?

b)Would Vivocom becomes Dragon in the Construction Sector?

Let all of us think base on the above information.

K)Conclusions

Based on the above, valuation at price RM0.18, the financial as below:

PE= 10.5<10 Max 20

P/BV=1.3<1.5 Max 2.0

EV/EBIT=6.7<8 

From the Isaham

Conclusion made that the Vivocom is good to be invested for mid to long term.

Notes:

1)The author only shares the Vivocom information, any decision made based on your own risk.

2)Previous articles wrote by the Author as below:

3)Some of the Vivocom News Link

http://www.vivocomgroup.com/Images/PressRelease/BorneoPost_08122015.pdf

http://www.vivocomgroup.com/Images/PressRelease/BusinessToday_16022016.pdf