Vivocom’ entry into affordable housing will support earnings October 19, 2016, Wednesday Sharon Kong, sharonkong@theborneopost.com
KUCHING: Vivocom International Holdings Bhd’s (Vivocom) entry into the affordable housing market will support earnings, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) observes, given that there is ready demand for affordable housing in Perak and East Coast of Peninsular Malaysia.
According to MIDF Research in a corporate update, Vivocom management aspires to diversify the group’s project portfolio and improves its working capital via affordable housing projects.
“While an affordable housing project generally provides lower single-digit margin for contractors, nonetheless it generates orderbook backlog for longer-term as well as tighter contractual obligations,” the research arm said.
“This would help to match Vivocom’s total construction revenue and earnings with cash inflows from predictable progress billings.”
MIDF Research highlighted that the recently clinched Kinta Valley and Tronoh affordable housing projects are crucial as a learning curve to provide experience in value engineering, traction of gaining tender advantage and wide content application of industrialised building system (IBS) in constructing affordable housing units.
“Vivocom is upbeat especially in East Coast of Malaysia where the demand of affordable housing exceeds supply,” the research arm said.
It added that Vivocom’s management has indicated an expanding IBS content for building construction citing cost advantage as well as time savings as primary drivers.
In MIDF Research’s view, Vivocom’s interest in affordable housing segment comes as no surprise as the State Government of Perak has announced in January 2016, the rolling out of 10,000 units of affordable housing by 2018.
“The Perak Housing Department currently has a waiting list of more than 12,000 applicants for its affordable housing schemes.
“Another example is Terengganu, which has a waiting list of 56,000 applicants since end of 2015,” the research arm noted.
Meanwhile, on the strength on the group’s balance sheet, MIDF Research believed that Vivocom presents a compelling risk/reward opportunity amidst the pressured share price.
Vivocom’s orderbook of RM3.5 billion is at all time high or approximately 48-month orderbook backlog (38-fold financial year 2015 (FY15) construction revenue cover which is the highest in the research arm’s coverage).
Premised on the group’s FY15 working capital/net income cover of 12.1-fold and diligent FY15 working capital/orderbook cover of 0.03-fold, the research arm viewed that Vivocom’s balance sheet fundamental strength is set to outweigh the risk of heavy orderbook execution.
On to its FY16/FY17 earnings estimates, MIDF Research has altogether reiterated earnings projections which are underpinned by a growing orderbook of circa 15 per cent which will swell to more than RM4 billion based on affordable housing projects that Vivocom has tendered.
MIDF Research has also reaffirmed its ‘buy’ recommendation with a target price of RM0.63 per share based on FY17 sum-of-parts (SOP) methodology on an implied prospective price earnings ratio (PER) of 13-fold which is on the lower end of the research arm’s small to mid-cap construction PER range of 10-fold to 14-fold (up 1.3 standard deviation above the mean of 12).
Total Value Date Receive LOA Date Commerce Date Completion Durations Remarks 1 Pavilion Hilltop, Mont Kiara fr CRCC 34,762,000.00 11/12/15 1/12/16 7/12/18 18 months 2 Rumah Selangorku Bdr Ulu Klang fr CRCC 116,400,000.00 12/8/15 1/18/16 7/1/17 18 months 3 1 Gateway Klang, Selangor fr CRCC 195,525,000.00 11/12/15 1/12/16 12/1/18 3 years 4 Neata Aluminium old orderbook as September 2016 351,753,000.00 11/12/15 Kemensah height (82.4mil),tamarind square(10.3mil),lumi tropicana (37.7mil), KL Gateway (15.4), Eclipse Residence (15mil) 5 Teras Millenium to Instacom for Telco Hub sites 29,000,000.00 11/12/15 1/12/16 8/12/16 7 months 6 Jointly Develop Kharisma Port Indonesia 1/15/16 No agreement sign 7 Desa Tasik Project fr Coneff Corp (2 block Commercial) 240,418,000.00 1/20/16 3/8/16 12/8/19 45 months 8 Desa Tasik Project fr Coneff Corp (24 storeys Condo ) 230,000,000.00 1/26/16 9 PBT Engineering for Third Avenue Cyberjaya to Neata 22,500,000.00 4/4/16 4/4/16 9/4/17 17 months 10 V-Development fr Gated Housing Bdr Ulu Klang 15,000,000.00 4/4/16 7/1/16 2/1/18 18 months 11 Green Venture Chepor Hulu Kinta Project 90,000,000.00 4/26/16 12 De Facto Wilayah Sultan Azlan Shah Hulu Kinta Project 160,000,000.00 5/5/16 13 Goldenhill Accenture Genting Sempah pahang project 46,000,000.00 5/20/16 7/20/16 7/20/18 24 months 14 Kiara5 Development Kg Kayu Ara Sg buloh 25,000,000.00 6/23/16 8/23/16 2/23/18 18 months 15 Lim Hoo Seng Construction Lorong stonor project to Neata 12,800,000.00 6/23/16 6/30/16 5/1/19 35 months 16 Seni perspek Bandar tasik Amanjaya Daerah kinta 756,000,000.00 8/4/16 JCA status 17 Green Venture Wilayah Chepor Project 18storeys Apartment 100,000,000.00 8/19/16 24 months 18 Dazamega Mukim Hulu Kinta Project 600,000,000.00 9/1/16 48 months HOA status Total Project Pipeline that annouced in BursaMalaysia 3,025,158,000.00
Vivocom's already a spent force after bonus issue. So it will take quite a long time to recover. Can KIV only
As for Bpuri - the Bull Power is still young.
And Bpuri already secured over Rm200 million Prima Housing project in Iskandar. With prices below Rm200,000 and the 100% loan for 1st Time Buyers BPuri's Apartment will sell like hot cakes!!
This article first appeared in The Edge Financial Daily, on October 21, 2016.
Bina Puri Holdings Bhd (+ve) Red Flag SHARES in Bina Puri Holdings Bhd (fundamental: 0.15/3; valuation: 1.1/3) triggered our momentum algorithm yesterday for the third consecutive day. It was also the fifth time it had been picked since October began. However, it was highlighted as a “red flag” stock by our proprietary algorithm, suggesting that investors should exercise extra caution while trading in its shares. The counter closed 0.5 sen or 1% higher at 49.5 sen yesterday, with 7.73 million shares traded. In comparison, its 200-day average volume is around 602,667 shares. Bina Puri announced earlier this month that it would be forming a 50:50 consortium with China’s CCCC Dredging (Group) Co Ltd to jointly develop a waterfront resort city in Kuantan, with an estimated gross development value of RM15 billion, over 10 years. The stock currently trades at a trailing 12-month price-earnings ratio of 48.12 times and at 0.53 times its book value.
....this kuantan water front may be need reality check wth respect to local economic contact....can local suport i.e be the end buyer to this rm10bil for next 10 years or it just wishful project plan to goreng the share for current coming bullish cycle....
Calvin i just following your q..:) n just coinsident...i know u have many more counters....but i am just small timer buy few n go long sleep...to next bull cycle to cash out...last time was gadang only...cashed out already...now just side line looking for next good potential counter the have realistic projects and biz to ride on the tsunami wave
Calvin used to say don't counts chickens before they hatched. Now he is doing the same thing in bpuri. really flip flop kings, no integrity. Becareful with this penny stock with huge PE and very poor earning margin.
...well we all just sharing idea and opinion and up to anybody to make up the own judgement and conclusion.....depend on individual trading style...my way is looking just around 3 counters the most wth likely very good fundimental/realistic posible project and bizz plan buy n keep go to sleep for 1 to 2 years to let the projects n company grow wth time n cashhout...
Bpuri unable to get back retention money 10% for 2000 houses it built in Brunei. Not without reasons of course. I want Calvin to phone bpuri to find out himself.
ANNOUNCING THE BENEFIT OF 2017 BUDGET FOR BPURI DIRECTLY:
Announcement Subject OTHERS Description THE CONSTRUCTION OF 994 UNITS OF PR1MA HOMES COMPRISING OF APARTMENTS AND 20 UNITS OF SHOPS SITUATED ON 18.23 ACRES OF FREEHOLD LAND HELD UNDER GRN 293554; LOT NO. 96790, MUKIM PLENTONG, JOHOR BAHRU, JOHOR The Board is pleased to announce that Bina Puri Holdings Bhd. (“BPHB”) had received the Letter of Intent from PR1MA Corporation Malaysia (PR1MA) for the construction of 994 units of PR1MA Homes comprising of apartments and 20 units of shops to be undertaken by BPHB on 18.23 acres of freehold land held under Grn 293554; Lot no. 96790, Mukim Plentong, Johor Bahru at a price to be mutually agreed between PR1MA and BPHB. The estimated contract sum is RM230 million.
The said project is expected to contribute positively to the net assets and earnings of Bina Puri Group for the financial year ending 31 December 2016.
Please note that no directors, major shareholders and/or persons connected with them have any interests, direct or indirect, in the above matter.
SEE
GOVT has proposed to allow Prima Housing to be financed up to 100% if prices are not more than Rm300K per unit.
Per Unit cost for BPuri's project?
Rm230 mil divides by 994 = Rm231,000 per unit.
This will sell like hot cakes for 2 reasons
1) It will be affordable as it is only Rm231K a unit 2) Easy to get loan up to 100% 3) Good rental yield of Rm1,000 per month expected. At least 5% yield better than Bank FD.
AND INDIRECTLY WILL BE THE BUILDING OF RM55 Billions East Coast Rail Link, Hospitals, Schools & other Infrar works. Wait for more news awards.
MCA PRESIDENT LIOW WHO GRACED THE KUANTAN WATERFRONT PROJECT OF BPURI HAS STATED THAT THE FIRST PHASE OF THE RM55 BILLIONS EAST COAST RAIL WILL BE FROM KL TO KUANTAN. THIS WILL ENHANCE THE VALUE OF KUANTAN WATERFRONT DEVELOPMENTS.
..but still difficult to realize how rm10bil project eventually be bought by local kuantan people...
probably kuantan has about 1 million population so in average within 10 years each of then has to spend rm10k to by the project i.e rm1000 per annum....mmm look like bukit beruntung/lembah bringin to me...
....but i still believe the game is not finish yet...for what ever reason and news put in the mkt...as what Calvin posted potentially going for at least to around rm1 once bskl bullish cycle going to crazy mode...once they say terkey also can fly...probably in bskl 2nd push toward end of 2017....n currently just starting of 1st phase push up....juusstttt my wild guess...kiki...take it as a grain of salt... :) n good luck guys...
Bpuri has withstood the onslaught of naysayers and doubters to stand solidly at 48.5 cts. Scripts delivery are most taken up by strong hands - the value investors!
BPuri = Building Permenantly!
A Rock Solid stable stock with Built In Defense!!
STRONG MEN RETAIN RICHES!
Hold tight! Hold and Watch it Cross 80 cts first. Then to Rm1.00 & Rm1.50
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
VenFx
14,784 posts
Posted by VenFx > 2016-10-21 18:03 | Report Abuse
1st warning !
Run before $0.475 crashed .