WHO IS CNQC?
CNQC is a property developer and contractor listed on the HKEx with a
market valuation of HKD4.1 billion (~S$721m). The company currently
operates in three main business segments—property development in
Singapore, construction in Singapore, and foundation and superstructure
construction in Hong Kong and Macau. Astute followers of the local real
estate market would be aware that CNQC is actually a reputable player in
Singapore's property development scene, with 18 years of track record
and projects across the whole of Singapore. The company's property
development activities here have been focused on the development and
sale of condominiums and executive condominiums.
The largest shareholder of CNQC is Guotsing Holding Company Limited,
which controls 65.23% of CNQC's outstanding shares as at 30 Jun 17.
Guotsing is owned by Dr Du Bo (former Chairman of CNQC) and Qingdao
Qingjian Holding Co Staff Shareholding Union (an employee committee). As
such, we see a strong alignment of interest between management and
investors. The other substantial holder is China Great Wall AMC
(International) Holdings Company Limited (9.93%), which is a state-owned
enterprise.
The company continued to generate robust cash flows during 1H17, and
its debt/EBITDA ratio improved to 4.4x in the twelve months ended 30 Jun
17 (FY16: 6.6x). CNQC has also been consistently more profitable than
its peers, achieving an average return on invested capital of 17.4% in
the five years ended 2016. As a reference, Bloomberg data indicates that
the median five-year average ROIC of all construction and engineering
companies listed in Singapore or Hong Kong was 10.5%.
One of CNQC's latest project—the Le Quest at Bukit Batok—attracted
strong sales on its first day of launch in August, with 280 of the
project's 516 units sold within hours. The take-up was an
oversubscription as only 200 units were initially released for sale.
Below link was all the lastest housing project under its subsidiary CNQC Qingjian Realty is one of Singapore’s Top 10 Developers in Singapore for Consecutive 3 years.
So what is CNQC plan for Vivocom after major shareholding acquisition?
1) In order to bring more confidence in Vivocom, CNQC will change
Vivocom International Berhad to CNQC International (Malaysia) Group
Development Berhad. Like what they did CNQC Myanmar & Singapore. But
in order to do so, CNQC may continue to buy share holding in open
markets or through proxy Macquarie PP to raise their holding to 51%.
This move enaBle Vivocom has lessfreefloating shares and more stable
share price.
2) Since Vivocom has been sub contractor in few PPA1M housing projects,
CNQC wil make Vivocom as PPA1M housing developer rather than just a
subcontractor. If Vivocom become project owner and built houses
themselves enable Vivocom has better profits margin and higher revenue
in coming future. In term of Financial Funding, CNQC shall able to back
up Vivocom . Not to forget Neata also doing Aluminium Fabrication that
also save more cost for supplying aluminium frame to its own condominium
project.
3) Bidding more big construction infrastructure tender like ECRL,
HSR, Gemas JB Railway, MRT, Kelantan Airport. In the past, CNQC has went
aboard and win projects in Indonesia & Yangdon Myanmar.
4) Moving Vivocom to Main Board. With more and more construction
revenue coming in the future, Vivocom no longer is a ACE counter in long
term. Vivocom already met criteria for Main Board Listing.
Its a matter of time, they will announce the plan to share holders.
http://klse.i3investor.com/blogs/Ilovehit2/137053.jsp
