This article first appeared in The Edge Financial Daily, on March 17, 2016.

KUALA LUMPUR: ACE Market-listed Vivocom International Holdings Bhd is said to be in the midst of finalising some RM1.5 billion worth of contracts over the next six months, according to CIMB Investment Bank Research (CIMB Research).

“This was a big positive surprise, in our view, as combined with RM600 million in new contract wins announced so far, and assuming it secures RM800 million to RM1.6 billion from [the] Gemas-JB (Johor Baru) double-tracking project, our forecast of RM3 billion worth of contract wins in 2016 should be met or even surpassed,” said CIMB Research in a note yesterday.

The note was issued pursuant to a meeting that Vivocom executive director, Choo Seng Choon, had with 13 fund managers at CIMB Singapore.

Previously known as Instacom Group Bhd, Vivocom’s share price has been trending upward since Sept 18 last year, as the group shifts away from being a telecommunications tower builder to a construction company.

The counter surged to a multi-year high of 34 sen on Nov 20 and Nov 24 last year, from eight sen on Sept 18, an increase of 325%, though it pared some gains subsequently. Yesterday, it closed unchanged at 26.5 sen after some 16.1 million shares were traded, giving it a market capitalisation of RM655.94 million.

According to CIMB’s report, Vivocom, in explaining its competitive advantage and superior margins versus other listed construction companies, has emphasised that it runs a negotiated-tender business model, with two main focus segments: as a subcontractor to China Railway Construction Corp Ltd (CRCC) and as a main contractor to non-CRCC-related jobs.

It retained its “add” rating on the stock, with a target price of 67 sen, adding that potential rerating catalysts are contract win announcements and strong first quarter ended March 31, 2016 results.