Short position - Vivocom / Comintel /LNG
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Short position - Vivocom / Comintel /LNG
Saturday, 2 July 2016
Is Vivacom’s Yeoh staying or leaving?
THE goings on with Ace Market-listed Vivocom International Holdings Bhd begs more explanations.
The company needs to clearly tell investors if its chief executive officer Datuk Seri Yeoh Seong Mok is staying or leaving the company. This is because Yeoh’s presence in Vivocom is crucial, at least going by past reports on his role in the company.
Vivocom had declared that it is looking at achieving revenue of RM3bil from construction jobs by 2018. This was to be driven by Yeoh, who joined the company last November, bringing his many years of experience in construction. He was also seen as a key person for potential construction subcontracts from CRCC Malaysia Bhd, which is part of China Railway Construction Corp Ltd, listed in Hong Kong and China’s largest construction company.
This matter of Yeoh leaving Vivocom came to light in a recent media report. In response, Vivocom had said: “The board of directors have not to date received any official letter of resignation nor unofficial notification from Yeoh on his purported intention to resign or retire.”
This doesn’t really clarify the concern. Perhaps the board should have checked with Yeoh and given his reply to the question of whether he’s leaving.
Vivocom did add that if Yeoh does resign, the company’s direction and operations would not be adversely affected.
That is a surprise because when his entry was with great fanfare, with a leading research house even describing it as a new era for the company.
Still the RM3bil worth of projects is not an easy target to achieve. The company is winning jobs from other non-CRCC related firms but it still needs to convince investors that it can successfully win those jobs and turn those projects into profits.
Comintel’s long-delayed RE project
A WEEK before Comintel Corp Bhd announced its first quarter results, its share prices plunged by 29%.
The drop is not easy to understand because Comintel’s first quarter ended April 30, 2016 showed a trippling of its net profit from a year ago. So why was there some selling of the shares?
In fact, Comintel’s erratic share price movements are never easy to figure out. Before the recent fall, its shares hit a eight-year high of 95 sen on June 17 within a three week period.
Last December shares in the company soared 160% from Dec 15-28, touching its seven-year high after the company announced its third quarter results.
Its net profit for that quarter jumped more than seven-fold to RM4.86mil from a year ago.
The jump in earnings continued in its fourth quarter ended Jan 31, 2016, with net profit jumping by more than 10 times.
With Comintel showing that kind of steady growth, its share price should have been progressing gradually. Instead, its share price chart displays wild swings up and down.
It trades an undemanding trailing price earnings multiple of 6 times, based on its current price of 77 sen.
Comintel is a technology-based company, which specialises in radio frequency communication solutions. But perhaps some of its investors have been excited and anxious at the same time about the company’s foray into the green energy space.
The group plans to set up a renewable energy power plant, which will sell back converted electrical power to Tenaga Nasional Bhd under the country’s feed in tariff (FiT) regime.
However it has so far been given three extensions to begin this. In its latest filing, Comintel says the reason for the latest extension is that it has yet to obtain the approval for its permanent licence from the Energy Commission.
Comintel said it should be able to meet the new extended FiT commencement date and the project is expected to contribute positively to the financial year ending Jan 31, 2017. That is something which will be watched.
Gas price conundrum
GAS price is up again in line with the Government’s programme to rationalise the energy industry and reduce the subsidy.
For the non-power sector, the increase is by RM1.52 per one million British thermal units (mmbtu) to RM27.05 per mmbtu. As for the power sector, the price of piped gas is increased from RM18.20 per mmbtu to RM19.70 per mmbtu.
The latest series of price hikes for the power and non-power sector brings the tariff closer to international prices.
But the question is what is the international price of gas?
There is no real international standard for gas prices because the price is sensitive to the market that requires the gas. For natural gas to be exported, it has to be compressed to liquefied form (LNG) and transported in tankers.
So the price for gas shipped from the US to Japan will differ from the same commodity shipped from Malaysia to Japan.
However, based on data from the Federal Energy Regulatory Commission (FERC), the price of LNG is generally about US$4.50 per mmbtu which works out to about RM18.45 per mmbtu.
For instance based on FERC data, the world LNG estimated landed price is US$4.40 in China, US$4.50 in India and US$4.55 in Japan. In the US, it is significantly cheaper.
However this price does not include the cost of converting the LNG to gas and it being piped to the end-customer. Nevertheless, the cost of converting and “wheeling” the gas to the client cannot be too high.
Considering that the LNG landed price is already low in many countries, it should not be much higher in Malaysia.
Hence can we expect lower gas price hikes in future, especially for the non-power sector that is already suffering from the volatile currency and slow economy?
Short position
Is Vivacom’s Yeoh staying or leaving?
THE goings on with Ace Market-listed Vivocom International Holdings Bhd begs more explanations.
The company needs to clearly tell investors if its chief executive officer Datuk Seri Yeoh Seong Mok is staying or leaving the company. This is because Yeoh’s presence in Vivocom is crucial, at least going by past reports on his role in the company.
Vivocom had declared that it is looking at achieving revenue of RM3bil from construction jobs by 2018. This was to be driven by Yeoh, who joined the company last November, bringing his many years of experience in construction. He was also seen as a key person for potential construction subcontracts from CRCC Malaysia Bhd, which is part of China Railway Construction Corp Ltd, listed in Hong Kong and China’s largest construction company.
This matter of Yeoh leaving Vivocom came to light in a recent media report. In response, Vivocom had said: “The board of directors have not to date received any official letter of resignation nor unofficial notification from Yeoh on his purported intention to resign or retire.”
This doesn’t really clarify the concern. Perhaps the board should have checked with Yeoh and given his reply to the question of whether he’s leaving.
Vivocom did add that if Yeoh does resign, the company’s direction and operations would not be adversely affected.
That is a surprise because when his entry was with great fanfare, with a leading research house even describing it as a new era for the company.
Still the RM3bil worth of projects is not an easy target to achieve. The company is winning jobs from other non-CRCC related firms but it still needs to convince investors that it can successfully win those jobs and turn those projects into profits.
Comintel’s long-delayed RE project
A WEEK before Comintel Corp Bhd announced its first quarter results, its share prices plunged by 29%.
The drop is not easy to understand because Comintel’s first quarter ended April 30, 2016 showed a trippling of its net profit from a year ago. So why was there some selling of the shares?
In fact, Comintel’s erratic share price movements are never easy to figure out. Before the recent fall, its shares hit a eight-year high of 95 sen on June 17 within a three week period.
Last December shares in the company soared 160% from Dec 15-28, touching its seven-year high after the company announced its third quarter results.
Its net profit for that quarter jumped more than seven-fold to RM4.86mil from a year ago.
The jump in earnings continued in its fourth quarter ended Jan 31, 2016, with net profit jumping by more than 10 times.
With Comintel showing that kind of steady growth, its share price should have been progressing gradually. Instead, its share price chart displays wild swings up and down.
It trades an undemanding trailing price earnings multiple of 6 times, based on its current price of 77 sen.
Comintel is a technology-based company, which specialises in radio frequency communication solutions. But perhaps some of its investors have been excited and anxious at the same time about the company’s foray into the green energy space.
The group plans to set up a renewable energy power plant, which will sell back converted electrical power to Tenaga Nasional Bhd under the country’s feed in tariff (FiT) regime.
However it has so far been given three extensions to begin this. In its latest filing, Comintel says the reason for the latest extension is that it has yet to obtain the approval for its permanent licence from the Energy Commission.
Comintel said it should be able to meet the new extended FiT commencement date and the project is expected to contribute positively to the financial year ending Jan 31, 2017. That is something which will be watched.
Gas price conundrum
GAS price is up again in line with the Government’s programme to rationalise the energy industry and reduce the subsidy.
For the non-power sector, the increase is by RM1.52 per one million British thermal units (mmbtu) to RM27.05 per mmbtu. As for the power sector, the price of piped gas is increased from RM18.20 per mmbtu to RM19.70 per mmbtu.
The latest series of price hikes for the power and non-power sector brings the tariff closer to international prices.
But the question is what is the international price of gas?
There is no real international standard for gas prices because the price is sensitive to the market that requires the gas. For natural gas to be exported, it has to be compressed to liquefied form (LNG) and transported in tankers.
So the price for gas shipped from the US to Japan will differ from the same commodity shipped from Malaysia to Japan.
However, based on data from the Federal Energy Regulatory Commission (FERC), the price of LNG is generally about US$4.50 per mmbtu which works out to about RM18.45 per mmbtu.
For instance based on FERC data, the world LNG estimated landed price is US$4.40 in China, US$4.50 in India and US$4.55 in Japan. In the US, it is significantly cheaper.
However this price does not include the cost of converting the LNG to gas and it being piped to the end-customer. Nevertheless, the cost of converting and “wheeling” the gas to the client cannot be too high.
Considering that the LNG landed price is already low in many countries, it should not be much higher in Malaysia.
Hence can we expect lower gas price hikes in future, especially for the non-power sector that is already suffering from the volatile currency and slow economy?
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