VICOM

[violinist]

没上车好过搭错车。

[shanrui_91]

Heng Chye Kiou has announced his retirement, being at an age of 60 and will be replaced by Sim Wing Yew, 44, who is also the current CEO of ComfortDelGro Engineering Pte Ltd.

If he has indeed bought the 1 million of shares at $4.00, that's going to be a good motivation for him to work harder.

[Musicwhiz]

Heng Chye Kiou has announced his retirement, being at an age of 60 and will be replaced by Sim Wing Yew, 44, who is also the current CEO of ComfortDelGro Engineering Pte Ltd.

If he has indeed bought the 1 million of shares at $4.00, that's going to be a good motivation for him to work harder.

Nah, we can't assume Mr. Sim is the buyer of that 1 million shares from Mr. Heng. All we do know as a fact is that Mr. Heng sold out 1m shares as a placement to another investor, and obviously this was a prelude to him stepping down as CEO.

This is good leadership renewal in place. Let's hope that VICOM, under Mr. Sim's leadership and with his experience in ComfortDelgro, can take the Company to greater heights (and higher dividends).

[shanrui_91]

that's why i add a "if" in front. i had this feeling earlier on as i just felt that it was rather strange that the CEO will sell away a major part of his shares before the AGM (where he has to ans shareholder's question) and that if he wait until aug, sept, he can earn another 17 cents dividend.

[Bibi]

Heng Chye Kiou has announced his retirement, being at an age of 60 and will be replaced by Sim Wing Yew, 44, who is also the current CEO of ComfortDelGro Engineering Pte Ltd.

If he has indeed bought the 1 million of shares at $4.00, that's going to be a good motivation for him to work harder.

Only 60 years old and he is retiring. Either the job is stressful or the sales of his Vicom shares since 2003 price till now is alot more than enough for him to retire early.

[d.o.g.]

This is good leadership renewal in place.

My reading of it is that it is not a renewal but a consolidation, effectively a removal of Vicom's CEO post by combining it with a ComfortDelgro appointment. It saves ComfortDelgro a big paycheck. Sim Wing Yew started as a GM of 2 workshops in SBS Transit, then GM of all 5 SBS workshops, then COO and finally CEO of ComfortDelgro Engineering. Vicom is a comparatively small portfolio compared to being CEO of CDG Eng. In fact, looking at the CDG Annual Report it is clear that Sim is holding possibly the most important job in the Group - making sure the buses are operationally ready.

I suspect that as Vicom management retire they will replaced by CDG management who are already holding other appointments. Eventually there will be no Vicom-only managers, only CDG managers holding dual appointments. Then it will be simple for ComfortDelgro to privatise Vicom. No senior managers in Vicom will lose their jobs after the privatisation (since they have other roles in CDG), so there will be no resistance at Vicom. My guess is either a straight cash offer, CDG shares (at a discount to encourage taking scrip), or some combination of the two.

This privatisation will not happen so soon, especially given Vicom's high share price (unless CDG's price goes up even more). But it is the logical thing to do for CDG. "Cost savings" is a great excuse. After all Vicom is tightly held, there is no liquidity, they have never raised funds from the market since IPO, etc. So enjoy your dividends while you can.

[wee]

hi d.o.g.

insightful comments. I am just wondering - there don't seem to be any specific indication (or have i missed it) of a dual appointment of the CEO?

This is good leadership renewal in place.

My reading of it is that it is not a renewal but a consolidation, effectively a removal of Vicom's CEO post by combining it with a ComfortDelgro appointment. It saves ComfortDelgro a big paycheck. Sim Wing Yew started as a GM of 2 workshops in SBS Transit, then GM of all 5 SBS workshops, then COO and finally CEO of ComfortDelgro Engineering. Vicom is a comparatively small portfolio compared to being CEO of CDG Eng. In fact, looking at the CDG Annual Report it is clear that Sim is holding possibly the most important job in the Group - making sure the buses are operationally ready.

I suspect that as Vicom management retire they will replaced by CDG management who are already holding other appointments. Eventually there will be no Vicom-only managers, only CDG managers holding dual appointments. Then it will be simple for ComfortDelgro to privatise Vicom. No senior managers in Vicom will lose their jobs after the privatisation (since they have other roles in CDG), so there will be no resistance at Vicom. My guess is either a straight cash offer, CDG shares (at a discount to encourage taking scrip), or some combination of the two.

This privatisation will not happen so soon, especially given Vicom's high share price (unless CDG's price goes up even more). But it is the logical thing to do for CDG. "Cost savings" is a great excuse. After all Vicom is tightly held, there is no liquidity, they have never raised funds from the market since IPO, etc. So enjoy your dividends while you can.

[brattzz]

CDG is slowly replacing VICOM's senior management.. yes, a GO is inevidentable.

Accumulate when price goes low...

[shanrui_91]

really great insight, d.o.g. At first i was still thinking if CDG was thinking of throwing CDG engineering to VICOM, but now what you say makes much more sense. we can only hope that it will not happen as soon since there's no way we can object to it with their 66% shareholding and that people will want to sell out due to the low liquidity nature of the stock

There's no mention of dual appointment but he is made the CEO of VICOM without stepping down from his role in CDG Engineering. CDG Engineering main task is to help maintain their bus and taxi fleet.

I will rather not have a GO, unless the P/E shoots up to more than 20. Never kill a cash cow especially when it is still maturing and growing.

[Musicwhiz]

Hi shanrui_91,

Sorry, did not notice the "if" there.

Hi d.o.g.,

Thanks for your insights. Always good to learn from you and your way of analyzing a situation. Hope to be able to become a much better investor as the years go by.