KUALA LUMPUR: Vivocom International Holdings Bhd, fresh from winning a RM100 million contract last week, is expected to clinch another construction project with a gross development value (GDV) of about RM600 million in Ipoh.
Sources said the construction industry was abuzz with news that a significant win was on the horizon for Sarawak-based Vivocom.
This contract was just the “tip of the iceberg” for the firm as it was set to win more lucrative projects in the future, they said.
“The Perak government and the company is finalising a contract for a construction project valued at RM600 million in Ipoh,” one of the sources told Business Times.
Vivocom executive director Choo Seng Choon told Business Times he “is not in a position to confirm or deny this development”.
“Please wait for the appropriate announcement to be made.”
However, he admitted that the senior management of Vivocom had been working “12-hour days to ensure smooth commencement and execution of the company’s various construction projects”, adding that the company had also expanded its construction team rapidly in recent weeks in line with the swelling order book.
“We have hired some highly experienced construction professionals to oversee various projects,” he said.
Vivocom announced to Bursa Malaysia on Friday it had received a letter of award for a RM100 million contract from Green Ventures Development Sdn Bhd to be the turnkey contractor to build two 18-storey blocks in Chepor, Perak, for the 1Malaysia Civil Servants Housing programme.
Meanwhile, a construction professional said the industry was surprised at Vivocom’s amazing transformation in the recent months.
The company has been winning over market cynics and quietly delivering secured projects while hiring top professionals to oversee various projects, some of which are of national interests.
Separately, CIMB Research believes that Vivocom’s order book is expected to swell to the tune of RM4 billion by year-end if the company hits its target of RM1.8 billion for second half of this year.
The research house believes “its (Vivocom’s) contract win of RM3.5 billion will surpass its RM3 billion estimate for 2016”.
In a recent note to investors, CIMB Research said Vivocom’s fast-growing order book “will lend strong support to its 2017 earnings visibility”.
Earlier this month, Vivocom announced it had secured a RM756 million contract, its largest win to date, to build 4,000 units of
affordable housing over four phases in Perak.
The project consists of 15 blocks of apartments over 26ha and it will form part of the mammoth 594ha Bandar Tasik Amanjaya township
in Tronoh, on the outskirts of Ipoh.
“The award brings Vivocom’s contract wins year-to-date to RM1.7 billion and the outstanding order book to RM2.2 billion,” said CIMB Research.
“A RM4 billion order book will place Vivocom alongside mid-cap construction companies such as Sunway Construction and WCT Holdings Bhd.”
On Bursa Malaysia last Thursday, Vivocom closed at a 10-week high of 31 sen.
Investors have also been pouring money into the stock ahead of its one-for-four bonus issue, which is expected to be completed next month.
CIMB Research believes the company’s swelling order book provides “scope for massive price/earnings re-rating”.
The research firm has a target price of 78 sen for Vivocom.
Meanwhile, MIDF Research on Friday upgraded Vivocom’s target price to 63 sen from 59 sen.