HK developer looks to control Vivocom
A HONG KONG-listed construction and property developer is believed to be looking to take a controlling stake in Malaysia’s fledgling construction firm Vivocom International Holdings Bhd.
The plan is to use Vivocom as its vehicle to bid for large construction projects in Malaysia, sources said.
The potential new major shareholder is also looking to undertake a rebranding exercise, and this will involve a name change for Vivocom, said the source.
The Hong Kong listed company will take a stake at a slight discount to Vivocom’s current market price. There is also a three-year moratorium for this new shareholder, added the source.
Shares of Vivocom were among some of the actively traded stocks since last week.
It closed up 0.5 sen to 14.5 sen on volume of 34.89 million shares on Thursday. At this price, the stock is currently trading at a FY17 price earnings ratio of five times.
Vivocom has a market capitalisation of 480.5 million ringgit comprising of some 3.31 billion shares.
Golden Oasis Resources Sdn Bhd is the single largest shareholder with a 22.85% stake followed by Ang Li Hann with a 10.29 per cent stake.
“This Hong Kong-listed company, it is looking to make inroads into Malaysia, having established itself in Hong Kong and Singapore. This company has cash of some HK$2.2bil as of June 30, 2017,” said the source.
Vivocom is a mid-sized construction company but its earnings have been on a downward trend of late.
In the second quarter to June 30, 2017, it posted net profit of 5.72 million ringgit, sharply lower from 21.01 million ringit previously. Revenue dropped to 45.94 million ringgit from 121.57 million ringgit.
For the first half, Vivocom’s net profit fell to 10.96 million ringgit from 40.89 million ringgit previously. Revenue also dropped to 86.97million ringgit from 263.1 million ringgit.