I am sure most of u heard the story of “ugly duckling”.
"Ugly Duckling" is a child with fairy tale and fable works

A possible “ugly duckling” story likely to happen in Bursa now…This “ugly duckling” likely to be

“VIVOCOM”

To turn a little “ugly duckling” into a swan, you need to satisfy 2 important conditions

i.              Who is the backing

ii.             The Management Team

Who Is The Backing?

Qinjian International HK Limited is controlling almost 30% Vivocom via a share swap. Qinjian HK is part of Qinjian Group China. Let see who is this 2 companies.

Qinjian Group China (CNQC Group)

 Qingjian Group Co., Ltd(hereinafter referred to as Qingjian)was established in 1952, which mainly engaged in domestic and international construction projects and investment, real estate development, capital management, logistics, design consulting and etc.

　　Qingjian was one of the first 15 enterprises in China to pass through the housing turnkey contract with top grade qualification. As one of the “Top 500 Chinese Enterprises” for 14 consecutive years, Qingjian ranked the 297th in 2017. As one of the “Top 80 Chinese Contractors” for 13 consecutive years, it ranked the 12tht in 2016. As one of “ENR the Biggest Worldwide 250 International Contractors” for 12 consecutive years, Qingjian ranked the 64th in 2017. In 2005, Qingjian was granted the “National Quality Management Award” which was the third awarded construction enterprise; Qingjian won the first “Mayor Quality Awards of Qingdao City” in 2012. In recent years, Qingjian has attained over 300 honors and awards at or above provincial level including “China Famous Trademark”，“National Outstanding Construction Enterprise”, “National Customer Satisfaction Enterprise” and etc.

　In the meanwhile, since the good credit Qingjian Group has won the countless awards & prizes including “National Enterprises of Good Creditworthiness”, “National Credit Grade AAA Construction Industry”, the first batch of “China Credit Demonstration Units” approved by Ministry of Commerce, and “Credit Grade AAA International Contractor” & “Credit Grade AAA International Labor Cooperation Enterprise” by China International Contractors Association. Qingjian Group has also been honored as the AAA Credit Rating Enterprise by multiple banks, such as China Construction Bank, Agricultural Bank of China, and etc.

More details refer to here…http://www.cnqc.com/en/Index.aspx. In short, CNQC Group is huge and it is a well established company.

 Qinjian International HK Limited

CNQC International Holdings Limited is a contractor in the Hong Kong foundation industry and are principally engaged in the foundation business and machinery leasing business in Hong Kong and Macau. CNQC International Holdings Limited is an established property developer and contractor primarily engaged in the development and sale of executive condominiums (a hybrid of public and private housing) and condominiums (private housing) in the Outside Central Region of Singapore; and the provision of construction services as main contractor for both governmental authorities and private property developers in Singapore. It is a public listed company in HK Stock Exchange.

The Management Team

How good is the management team is fully reflected in the biz that they venture into oversea and their financial result performance.

In Singapore the company main biz involves in property development and provides contractor services for both private and govt sector. The total property sales to date is more than HK50b.

In HK and Macao, their main biz is construction pilling. More detail of the biz can be found here

http://www.cnqc.com.hk/en/project-list/SINGAPORE/Construction-Business

Their last 5 years financial result of CNQC HK is great with profit surge from below HK50m to almost HK600 from 2012 to 2016.   Current PE ratio of 5.78 and market cap of more than HK4b. http://quotes.wsj.com/HK/1240/financials

The Past “Ugly Duckling”In Bursa Malaysia Stock Exchange

Bescrop : A PN4 company took over by WCT become WCT Land

RB Land took over by IJM become IJMLAND

Larut took over by IJM become WCEBHD

Focal took over by LKS (SPsetia ex Boss) become Ecoworld

Layhong took over by QL

Shell took over by China become Hengyuan

Latest Drb sold a majority stake to China Geely and now on the process to become a beautiful swan

U can see 2 important factors that change an “ ugly duckling to swan” clearly see from here : Who is the super power back-up and The Management Team

Of course, there is another important factor that happened in last 2 cases that didn’t appear in the former “ugly ducking” play …The China Super Power Play. Shell (Hengyuan) rocket up from below 2 to hit almost 9 in 6 months. DRB surge from around 70c to 1.80+ also in less than 6 months.

So the new “Ugly Duck” Vivocom has the potential to become a super beautiful swan. This swan might be big and huge yet beautiful since the back-up is mighty huge. It is the largest among all cases. It is up to you to belif. I won’t be surprise the stock might even go beyond RM1 in the near future. The reason is simple. Anything below RM1 is considered a penny. A penny doesn’t sound good for a well established group of company. But one thing is for sure to come for Vivocom.. a series of positive change will come along the line…Will start from i. Change of company name…ii. moving to Main Board…iii. injection of projects…iv. tendering and securing more construction and property development projects (clearly see from what happen in Spore market)….v. boosting of order to the moon…of course last and not least…vi. share price is going to surge to the moon !!!!!

Did everyone wonder why this thing happening now ? I belif it is long well in the plan. You can see from MIDF report dated 29 July 2017. “ Vivicom may see entry of foreign new shareholder” Then Macquarie Bank is planning to take up 10% of PP. One big reason is because Vivocom has a very good working relationship with CRCC. It also a preferred and main contractor for CRCC. CRCC has already secured more than 65b railway construction projects in Msia. The contracts work will be out very soon and likely to start with last quarter of this yr and many will be given out next yr. Vivocom certainly in good position to secure some of this projects just question is how much. However, without a strong back-up it may need to face high execution risk as the project is huge. With CNQC coming into the picture, this execution risk is gone. Vivocom is now ready to enter the next trajectory growth stage. 

How about the technical reading about this little "ugly duck"?