11 November 2020 SEE JOVIN Equities Research Malaysia DISCLAIMER: This report has been prepared by See Jovin See Jovin does not have any business with the company covered in this research reports but owns the shares of the company. As a result, investors should be aware that the firm may have a conflict of inter est that could affect the objectivity of this report. Investo rs should consider this report as only a single factor in making their investment decision. See Jovin is not recommending neither a buy nor sell call. This research report is purely prepared for educational purposes only. 1 VIVOCOM (Stock code: 0069) Initiate initial coverage under Event - Driven Trade category: To benefit in the short term from positive market sentiment towards the company INVESTMENT THESIS SUMMARY: SECTION 1: D ISTINCT AND POTENTIALLY REPEA TABLE PATTERN found from our empirical studies, whereby we believe the stock will start its upwards movement within the next 6 0 days, with a target price of R M3.00 from current price ( 114 % upside). SECTION 2: FUNDAMENTAL CHANGE : We hold a positive view regarding the company’s recent announcement to expand from being a pure construction player into a construction cum property developer under the leadership of the new owner. We believe there is a potential synergistic effect arising from the merger that co uld boost the profit margin of the company. SECTION 3: ATTRACTIVE VALUATION : We believe Vivocom’s valuation were part of the reason for this merger. Vivocom was trading at 0.5 0 x price - to - book value, net gearing is at 0.055x and cash - to - short - term - borrowings is at 1.38x; all of which are attractive valuation for the industry. SECTION 4: SUPPORTIVE GOVERNMENT POLICIES : Since late 2018, government started to stimulate the local h ousing market by introducing a series of favourable policies, particularly in the affordable housing segment, which is V Development’s focus. SECTION 5: ACTIVE ACQUISITIONS : The group’s vision of actively seek ing out M&A opportu nities initiated since 2011 as part of the growth strategy. (Sections 2 - 5 are presently under planning and will be published in due course) Initiation of coverage 11 November 2020 Current Price RM 1. 39 Target price RM 3.0 0 Upside 114 % Author: See Jovin I3investor : https://klse.i3investor.com/blogs/see/blidx.jsp Telegram: https://t.me/TBTFW Email: seejovin@gmail.com PRICE CHART: KEY DATA: Share price : RM1.39 (+16.81%) Market cap : RM 787. 37 million No. of shares : 566,45 1 , 610 ADTV ( 3 M) : 15.86 million 11 November 2020 SEE JOVIN Equities Research Malaysia DISCLAIMER: This report has been prepared by See Jovin See Jovin does not have any business with the company covered in this research reports but owns the shares of the company. As a result, investors should be aware that the firm may have a conflict of inter est that could affect the objectivity of this report. Investo rs should consider this report as only a single factor in making their investment decision. See Jovin is not recommending neither a buy nor sell call. This research report is purely prepared for educational purposes only. 2 A special not e to my dear readers : Vivocom is a company that holds a special place in my heart. The story goes back to 2015, back when I was still studying to be a doctor at International Medical University. I was rather miserable studying medicine due to the lack of interest in the field . I attempted to escape from reality by doing everything else but study. A key moment in my life was when I joined OSK Investment Challenge (OSKIC). From OSKIC, I found that my passion was in finance. I spent all my free time learning about finance and i nvesting. In 2015, 5 years after I started investing, I stumbled into this company: Vivocom. Vivocom (then known as Instacom) was in the midst of a corporate exercise, and I was intrigued. I conducted due diligence and subsequently, I borrowed some money to invest into the company. Through a combination of good timing and a fortunate stroke of serendipity, the share price soared and I made a huge profit . By November 2015, I became a millionaire overnight. The money I made from Vivocom gave me the financia l freedom I needed in order to discontinue my medical degree to pursue my passion in investing. I followed my heart and have not looked back since. I spend every minute of my time doing what I love most : I NVESTING. Figure 1: Realized Profit & Loss of Se e Jovin For Vivocom in 2015 - 2016 Naturally, this company holds a special place in my heart. I continue to track the stock very closely to this very day since 2015. Summary: based on my research and findings, I believe that Vivocom will be a rare, multi - bagger investment opportunity in 2020 - 2021 . History is a bout to repeat itself as Vivocom is about to embark on a very exciting breakout in its share price. Here’s why: 1) The target price of RM 3. 00 by end December 202 0 is derived based on money flow, momentum trading and Elliott Wave theory projection. 2) I believe this will be a genuine and sustainable rally , unlike other stocks whereby the ir momentum peters out after a couple of days. 3) This stock has tremendous followings based on the number of buyers, buyers ’ quantit ies and massive liquidity from the past 6 months of trading. 11 November 2020 SEE JOVIN Equities Research Malaysia DISCLAIMER: This report has been prepared by See Jovin See Jovin does not have any business with the company covered in this research reports but owns the shares of the company. As a result, investors should be aware that the firm may have a conflict of inter est that could affect the objectivity of this report. Investo rs should consider this report as only a single factor in making their investment decision. See Jovin is not recommending neither a buy nor sell call. This research report is purely prepared for educational purposes only. 3 SECTION 1: A DISTINCT REPEATABLE PATTERN OF PRICE BREAKOUTS In section 1 , we will be illustrating Vivocom ’s past TWO PRICE BREAKOUTS and potentially a THIRD PRICE BREAKOUT Figure 2 : Chart of Vivocom’s share price from 2011 - 2020 Please note that all the share prices and volumes have been adjusted to reflect current post consolidation share prices and volumes Please focus your attention on the 2 periods as marked in the Figure 1: 1. Period A: Aug 2011 – Dec 2013 – FIRST B REAKOUT ; 2. Period B: Aug 2015 – May 2016 – SECOND BREAKOUT During these 2 periods, we have identified a distinct and potentially repeatable pattern of price breakout in its share performances : Figure 3 : Chart of Vivocom’s share price from Jan 2011 – Dec 2013 I n Figure 3 shows the chart of Vivocom’s share price from 2011 – 2013. Note that on the 11 August 2011 (red line), Vivocom (then known as I - Power) had proposed to acquire the entire stake of Instacom. Low : RM0.0455 High: RM0.1822 224 days (32 weeks) Price difference 400% Peak: RM0.1935 Low : RM0. 1002 Period B Period A 11 November 2020 SEE JOVIN Equities Research Malaysia DISCLAIMER: This report has been prepared by See Jovin See Jovin does not have any business with the company covered in this research reports but owns the shares of the company. As a result, investors should be aware that the firm may have a conflict of inter est that could affect the objectivity of this report. Investo rs should consider this report as only a single factor in making their investment decision. See Jovin is not recommending neither a buy nor sell call. This research report is purely prepared for educational purposes only. 4 Its share price started moving upwards, doubling up within 90 days of the announcement and co ntinue to close at RM0.1822 within 224 days (32 weeks) on 22 March 2012 (blue line). A 400% rise in share price within 32 weeks. This was the FIRST BREAKOUT. The company later reached its peak of RM0.1935 on 2 occassions: 20 May 2013 and 19 August 2013 (r ed circle) when the acquisition improved the company’s revenue and profit to become a profitable company again. A similar pattern is observed for Vivocom’s share price from 2014 - 2016. Figure 4 : chart of Vivocom’s share price from Jan 2014 – Dec 2016. The SECOND BREAKOUT - To cut the story short, during 2014/15 period, Instacom acquire d a total of 78.6% of Neata Aluminium in two tranches Within 60 days of the first acquisition , the share price doubled and continue its rally to a high of RM0.2080 , whilst within 110 days of the second acquisition , t he C ompany reached its peak of RM0.2304, a 480% breakout in share price from a low of RM0.0480 on 12 May 201 6. History Repeating Itself – Another Imminent THIRD B REAKOUT! Vivocom’s latest proposed acquisition announced on 27 October 2020 could potentially be another multi - bagger returns. Since the initial announcement in January 2020, when Dato Seri Chia became the largest single shareholder, Vivocom’s share price was trading at RM0.15 (adjuste d to present post - consol prices). It has since soared to RM0.45 pr ior to 2 nd Nov . Upon consolidation on 2 nd November the price ex at RM0.50 , and surged to a high of RM0.79 before retracing to close at RM0.675 Subsequently, the share price kept on shooting upwards fiercely , indicating that the interests among traders is extremely high and they are on the offensive . It closed RM1. 39 on 11 Nov 2020. 110 days (16 Weeks) Low : RM0.04 80 High: RM0.2080 Peak: RM0. 2304 11 November 2020 SEE JOVIN Equities Research Malaysia DISCLAIMER: This report has been prepared by See Jovin See Jovin does not have any business with the company covered in this research reports but owns the shares of the company. As a result, investors should be aware that the firm may have a conflict of inter est that could affect the objectivity of this report. Investo rs should consider this report as only a single factor in making their investment decision. See Jovin is not recommending neither a buy nor sell call. This research report is purely prepared for educational purposes only. 5 It is also worth noting that the surge i n share price wa s accompanied by massive rise in volume traded. The C ompany was a hot stock indeed, a Top 10 KLSE Performer in terms of volume every single day throughout May 2016, (refer to Figure 5 below) a n unprecedented record at that material time. The C ompany was then a KLSE Darling Stock, with unparallel enormous interests from investors and traders alike, undoubtedly the hottest momentum stock during that time for a sustainable period of several months. A truly amazing feat at that time when retail participation rate was at Bursa’s all - time low. Imazine if it’s with today ’s pandemic era like liquidity and super high retail participation rate, the volume, va lue and prices would have reached phenomenal levels! Date Position (Most active) Closing Price Volume Traded Value Traded (RM) VWAP 3 - May - 16 #2 0.218 112,570,313 24,078,790 0.2139 4 - May - 16 #3 0.221 84,877,969 18,477,934 0.2177 5 - May - 16 #2 0.218 57,445,469 12,517,368 0.2179 6 - May - 16 #5 0.214 56,707,188 12,163,692 0.2145 9 - May - 16 #5 0.221 104,261,719 22,948,004 0.2201 10 - May - 16 #3 0.221 67,936,875 14,851,001 0.2186 11 - May - 16 #1 0.227 126,982,031 28,545,561 0.2248 12 - May - 16 #2 0.23 0 176,570,156 40,293,310 0.2282 13 - May - 16 #1 0.221 184,729,844 42,026,040 0.2275 16 - May - 16 #2 0.214 154,736,406 33,423,064 0.216 0 17 - May - 16 #3 0.211 66,465,156 14,203,604 0.2137 18 - May - 16 #5 0.205 108,666,563 22,374,445 0.2059 19 - May - 16 #1 0.205 100,199,531 19,879,587 0.1984 20 - May - 16 #7 0.205 76,827,031 15,849,416 0.2063 23 - May - 16 #9 0.198 46,100,000 9,362,910 0.2031 24 - May - 16 #6 0.198 56,551,406 11,123,662 0.1967 25 - May - 16 #3 0.186 89,507,188 17,086,922 0.1909 26 - May - 16 #4 0.182 63,866,094 11,681,109 0.1829 27 - May - 16 #5 0.195 74,091,094 14,181,035 0.1914 30 - May - 16 #8 0.189 44,573,594 8,500,184 0.1907 31 - May - 16 #9 0.189 54,561,719 10,366,727 0.19 00 Cumulati ve 1,908,227,346 403,934,363 0.2117 In May 2016, Vivocom was consistently a Top 10 KLSE Performer throughout the whole month as outlined in the table below. (Figure 5) 11 November 2020 SEE JOVIN Equities Research Malaysia DISCLAIMER: This report has been prepared by See Jovin See Jovin does not have any business with the company covered in this research reports but owns the shares of the company. As a result, investors should be aware that the firm may have a conflict of inter est that could affect the objectivity of this report. Investo rs should consider this report as only a single factor in making their investment decision. See Jovin is not recommending neither a buy nor sell call. This research report is purely prepared for educational purposes only. 6 A whooping grand total of 950 million shares have been traded in the span of 10 days. In other words, an average of 95 .0 million shares per day have changed hands. This is 499 % higher than its 3 - month average daily traded volume of 1 5.86 million shares per day. Vivocom’s value transacted amounted to total of RM 756 million in the past 10 days, averaging RM 75.6 million per day. This is 461 % higher than its 3 - month average daily traded value of RM1 3.49 million per day. Vivocom was also third most traded in terms of value on 4 th and 6 th November respectively, trailing behind only Top Glove and Supermax, two of KLSE’s darling heavy weights. The exceptional liquidity of Vivocom’s shares, as seen from its high volume and value traded as well as a tight price spread is a rare phenomenon for small - mid cap stocks, as this kind of liquidity is usually seen in large cap stocks only. It is beloved by investors as it means investors can enter and exit at any given point in time without any difficulty. The buy rate is consistently higher than 50%, with the past 10 days average at 5 4.7 %, showing that there are more buyers than sellers in the market. Figure 6 : Key Resistance and Support Level for Vivocom Looking at the Figure 6 , we have determined a long - term support price at RM0.20, RM0.50 and RM1.00 as indicated with the orange line (adjusted post - consolidation). We have also determined its key resistance level at around RM1.20, RM1.45 and RM1.65 as indicated with the red line (adjusted post - consolidation). Vivocom’s share price has jumped by 3 09 % from RM0.45 to close RM 1. 39 on 11 Nov since the announcement of its acquisition of V - Development. Based on the momentum , the first peak (RM1.19) and first trough (RM0.89), we applied it according to Fibonacci numbers and Elliott Wave theory, we are confident to forecast 3 scenarios for the next 60 days. The 3 scenarios are : optimistic Blue Sky Scenario (BSS) , Most Likely S cenario (MLS) and Conservative S cenario (CS). By the end of December 202 0 , the target price for the stock is RM 3.60 , RM 3.00 and RM 2.60 for BSS, MLS and CS respectively (See Figure 7) 11 November 2020 SEE JOVIN Equities Research Malaysia DISCLAIMER: This report has been prepared by See Jovin See Jovin does not have any business with the company covered in this research reports but owns the shares of the company. As a result, investors should be aware that the firm may have a conflict of inter est that could affect the objectivity of this report. Investo rs should consider this report as only a single factor in making their investment decision. See Jovin is not recommending neither a buy nor sell call. This research report is purely prepared for educational purposes only. 7 Figure 7 : Target Price Forecast Based on Money Flow and Elliott Wave Theory Based on our EW computations, w e strongly feel that Vivocom’s strong price uptrend is a real and genuine rally a s we detect a very clear cut pattern whereby genuine rallies adhere to, which is, they are in most cases - “ gradual and st air stepped, shoots up strongly, people don’t believe it, then it either retraces or flat - lines before embarking on another aggressive upward spurts ” It is usually accompanied by massive buying quantities and high buyers to sellers ratio, with demand he avily exceeding supply as more people want to get a piece of the action. Figure 8 : Vivocom’s Year - to - date Share Price Jumped 927 % from RM0.15 to RM1.39 11 November 2020 SEE JOVIN Equities Research Malaysia DISCLAIMER: This report has been prepared by See Jovin See Jovin does not have any business with the company covered in this research reports but owns the shares of the company. As a result, investors should be aware that the firm may have a conflict of inter est that could affect the objectivity of this report. Investo rs should consider this report as only a single factor in making their investment decision. See Jovin is not recommending neither a buy nor sell call. This research report is purely prepared for educational purposes only. 8 To sum up our findings on Vivocom based on all the preceding illustra tions and write - up, we believe Vivocom is definitely a GEM worth monitoring closely over the next several months based on the followings : - 1) Its price has already soared by 927 % from RM0.15 to RM1.39 ( see Figure 8 ), showing tremendous money flow and great follow - through buying at every level, with minimal correction in share price. 2) It’s about to have a THIRD PRICE BREAKOUT (page 4) of quite massive proportions. 3) Based on our Elliot Wave forecasts we believe Vivoc om’s imminent THIRD PRICE BREAKOUTS will peak in the range of between RM 2.60 to RM 3.60 by the end of December 2020 ( see Figure 7 ). 4) We see minimal risks of share price collapse due to the tremendous liquidity of positive money flows into the stock and its high trade velocity. A rarity indeed in KLSE.