VICOM

from LTA's website, one can see the age profile (as of Dec14) of passenger cars in Singapore, summarised below

age no cars %
1 28547 4.6
2 21943 3.6
3 27288 4.4
4 27727 4.5
5 41402 6.7
6 68460 11.1
7 96674 15.7
8 105216 17.1
9 113962 18.5
10 73764 12
>10 11626 1.8

With the rather significant net decrease of inspections p.a. for the next 3 years, it will be interesting to see EPS going fwd.

Assuming that there aren't many being vehicles being scrapped for < 10 yrs car

2014 inspected vehicle = 27,727 + 68,460 + 105,216 + 73,764 = 275167
2015 to-be-inspected vehicle = 27,288 + 41,402 + 96,674 + 113,962 = 279326
2016 to-be-inspected vehicle = 21,943 + 27,727 + 68,460 + 105,216 = 223345
2017 to-be-inspected vehicle = 28,547 + 27,288 + 41,402 + 96,674 = 193911

In 2016, we will see a 20% drop or 55981 vehicles for < 10 yrs cars for inspection as compare with 2015.

Assuming the variable cost is zero...
55981 x $58 = $3.25 millions (EPS -3.67 cts)
For 2017 is 85415 x $58 = $4.95 million ( EPS -5.59cts)

Vicom is a slow and steady stock. Vehicle testing services isn't the highlight, base on Vicom...

Vicom sees 2014 earnings rise 6% to $30.1 million

Motor vehicle inspection service provider Vicom saw earnings rise 6% to $30.1 million from $28.4 million a year ago on the back of higher revenue.

Revenue for 2014 was $108.2 million or 3% higher than the previous year, contributed by higher business volume.

Meanwhile, the group’s operating expenses of $72.5 million for 2014 was $1.6 million or 2.3% higher than 2013 due mainly to the higher expenses needed to generate the increased revenue.

“The demand for the vehicle testing services is expected to moderate as more vehicles are expected to be deregistered in the year. The non-vehicle testing business is expected to grow even though competition remains keen,” said Vicom.

Vicom closed flat at $6.40 today.
http://www.theedgemarkets.com/sg/article...01-million

CD : 8.75cts!
Special : 9.5cts!

waos! Huat har!

Vicom's 1Q net profit up 5% to $8.52 million

By Gho Chee Yuan / theedgemarkets.com | May 11, 2015 : 5:53 PM MYT
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SINGAPORE (May 11): Vicom, the vehicle inspection services provider, saw its net profit for the first quarter ended March 31, 2015 (1Q15) grow 5% to $8.52 million from $8.12 million a year ago.

Quarterly revenue also strengthened by 5.2% to $28.3 million from $26.9 million last year on higher business volume.

Earnings per share (EPS) climbed to 9.5 cents in 1Q15 from 9.05 cents in 1Q14.

In a filing with SGX today, Vicom said its operating expenses up 5.7% to $18.4 million in 1Q15 compared to 1Q14 due to expenses incurred to generate the increase in revenue.

Its operating profit expanded by 4.2% to $9.9 million for 1Q15 compared to last corresponding period while profit before tax gained 5% to $10.2 million compared to last year.

According to Vicom, taxation for the group was 5% higher at $1.63 million in the current quarter under review due to the higher profit in the quarter.

On prospects, Vicom said the demand for the vehicle testing services is expected to moderate as more vehicles are expected to be deregistered in the year.

"The non-vehicle testing business is expected to continue to grow even though competition remains keen," it added.

The stocks closed one cents or 0.16% higher at $6.22, bringing its market capitalisation to $550.34 million.

A quasi-monopoly business, high ROE, low debt and a good price.

Boring steady company....no wonder not many want it...good for the contrarian few 

Vicom Limited (SGX: V01) announced their financial results for the year ended 31 Dec 15 on 4 Feb 16, after trading hours.

Revenue fell 1.3%, from S$108 million in FY14 to S$106 million in FY15. Net profit after tax increased by 4.2%. Vicom’s dividend increased by a stunning 8.2%, from 18.25 cents for 2H14 to 19.75 cents in 2H15.

More info can be found:
http://infopub.sgx.com/FileOpen/VICOM_FY...eID=388551

Vicom seems to have built up a considerable war chest in preparation for the storms ahead. Despite potential headwinds, Vicom managed to increase net profit and dividend. With increasing deregistration of cars impacting their future revenuethere is a need to closely track the number of vehicles that are registered, and the inspection prices.

____

Financial Freedom can be achieved through prudence and patience capital.
http://www.bytesizedinvestments.com/

Maybe it is CD that need $ "in preparation for the storms ahead"

(11-02-2016, 04:46 PM)opmi Wrote: Maybe it is CD that need $ "in preparation for the storms ahead"

We think both companies need to prepare for the storms ahead. Many have profited from this rock solid recession proof stock. However, we suspect that has some form of cyclical nature, pegged to government's release of newly registered cars. 

 [Image: VicomRevchart.jpg]
From the above graph, you can observe some co-relation of its revenue to the number of vehicles inspected, which is a function of the cars registered. How is the number of cars registered related to the number of cars inspected? All those who own a car should know. But for the benefit of those who don't basically, cars are mandated by the government to undergo vehicle inspection bi-annually after the 3rd year of registration onwards, and yearly after the 10th year onwards. So, with that, you can estimate the number of cars inspected. The table below shows the number of vehicles inspected and Vicom's revenue. 
[Image: Vicom-Table1.jpg]
With that, if we were to project 3 years from 2015, what would the number of vehicles that would require inspection...? Refer to the table below for an estimation...
[Image: Vicom-Table2.jpg]
There's quite a bit of assumptions in the projections so please take these with a pinch of salt. Perhaps its time to dust the pillow and review its fundamentals. We are sure the management is looking at how to better expand its business to be more resilent and cyclical proof. 

____

Financial Freedom can be achieved through prudence and patience capital.
http://www.bytesizedinvestments.com/a-deeper-dive-into-vicoms-fundamentals/

Thanks for the analysis - appreciate it. Still holding on to this after nearly 4.5 years and happy with the dividends so far.

Let's see how VICOM performs in 2016 - even if it won't be good, at least they have $100m on the Balance Sheet to tide them over.