After a hibernation period for a few years, Vivocom Int’l Holdings Berhad (Vivocom; stock code: 0069) came to life in the fourth quarter of last year upon its share consolidation exercise.
From an ex-price of 46.5 sen, it ascended to a high of RM2.05 in mid-November, thereby creating extreme wealth for shareholders who had been holding patiently.
Under the share consolidation exercise, every 10 shares and 10 warrants had been consolidated into one share and one warrant, respectively.
On the corporate front, a new substantial shareholder had emerged in the company early last year.
He is Dato Seri Chia Kok Teong, and with his emergence the Vivocom Group has now diversified into property development to complement its previous three core businesses of construction, aluminium and telecommunications.
Dato Seri Chia is said to be a low profile yet very savvy corporate figure.
It appears that he is strategically chartering new directions for the Vivocom Group and understood to have big and exciting growth plans ahead.
For one, with his Self-Imposed Moratorium or SIM, he is demonstrating his commitment to growing the Group by pledging not to sell any of his Vivocom shares in the open market for the next three years, as per the company’s announcement on 4 November 2020. This in itself is a rarity in corporate Malaysia as it’s never been done before.
This SIM pledge itself indicates that he must be supremely confident that the Vivocom Group must have something brewing or in store, which is both lucrative and sustainable and will maximise wealth for its shareholders in the long run. Or that he is totally dedicated to transforming Vivocom into an exciting high growth organisation in the foreseeable future. One can only surmise.
Whatever it is, the SIM does provide confidence to long term shareholders that he will always be with them each step of the journey ahead.
Vivocom’s share price has since corrected from its November 2020 high and closed last Friday at 82 sen, demonstrating a resilience in its share performance despite the current weak market sentiment. Even at the 82 sen level, it has still grown by 546% from 15 sen when Dato Seri first emerge in Vivocom as its largest shareholder in January 2020.
Nonetheless having once surged to RM2.05 in November 2020, with its price at current levels, it could be worth looking at to be part of the new CEO’s aspirations for Vivocom.
Should he succeed in transforming Vivocom into a sustainable growth group, the share price would likely move upwards in forthcoming months and years. Who is to say that it won’t surge higher than RM2.05?
If this happens, Vivocom, known amongst some investors as a ‘darling dragon’ for its SuperBull Rally during the 2015/16 period, is set to awake again to reward loyal shareholders for their belief in the company.
Note: This article is an opinion and not a recommendation to buy or sell shares. Please consult your financial adviser before making any investment decision.