High earnings visibility for Vizione, says report

KUALA LUMPUR (Oct 6): Vizione Holdings Bhd’s order book “provides relatively clear earnings visibility in the coming four years, at least”, The Edge Malaysia said in a report in its latest issue.

The weekly reported that the company’s order book of 23 projects of mainly construction jobs has “ballooned” to RM3.91 billion as at June 30.

Of these projects, 12 are private commercial developments worth RM2.661 billion, seven are government housing schemes with a contract value of RM589 million and four are infrastructure projects worth RM656 million.

Managing director Datuk Ng Aun Hooi told the business weekly that Vizione’s order book is 7.5 times the company’s market capitalisation of RM536 million as at last Thursday’s closing of 14 sen.

“Based on that ratio alone, we are probably one of the top five construction firms in the country. I don’t think there are that many builders out there holding such a huge order book against their market cap,” Ng said.

According to reports, Vizione’s net profits for the financial year ended May 31, 2018 (FY2018) was RM26.2 million, a sharp rise of about 43 times from RM0.6 million a year ago.

Its annual revenue grew eight times to RM413.2 million from RM49.1 million a year earlier.

“The reason for the big jump in earnings is the contribution from Wira Syukur (M) Sdn Bhd, a construction firm injected into Vizione through a cash-plus-shares deal worth RM280 million last October.

“Wira Syukur was founded by Ng and his two partners in September 1996. The asset injection appears to be a backdoor listing exercise for Wira Syukur,” reported The Edge Malaysia.

“By looking at the order book and profit guarantee from Wira Syukur, Vizione’s profit should at least double to RM52 million in FY2019 (ending May 31),” Ng told the weekly.

Ng also explained that Vizione has a tender book of more than RM3.4 billion. “Given its past success rate of about 30%, the company could replenish its order book by RM1 billion,” said The Edge Malaysia.

Vizione is also working with Vertice Bhd to undertake the construction works for a RM815 million contract awarded by Consortium Zenith. The Package 2 contract involves the construction of a 5.7km bypass connecting Bandar Baru Ayer Itam to Lebuhraya Tun Dr Lim Chong Eu as part of the Penang Transport Master Plan.

“My dream is to make Vizione one of the top 10 construction firms in Malaysia in terms of market capitalisation within the next two to three years,” Ng said.