Lifetime Membership Being the largest vehicle inspection and testing provider in Singapore, Vicom needs no introduction. In 2019, Vicom share price had been in a splendid form, surging from $6 in January 2019 to cap a high of $7.70 at end of 2019. In June 2020, the completion of the 1-to-4 stock split saw the counter trading at about $8.50 (in terms of pre-stock split level) at end of 2020.
In 2021, Vicom share price continued its fine form till May 2021. Since then, the counter fell to the current $2.05 bandwidth (which is about $8.20 in terms of pre-stock split level). The sudden loss of form of Vicom share price caught some investors by surprise. Is this the end of the road for Vicom share price? A long-time SG Wealth Builder Lifetime Member is concerned about the loss of form for Vicom share price and requested my insight.
Vicom’s vehicle inspection and testing services are essential services. Thus, this business segment should be immune to the impact of the pandemic. Amid the pandemic, the Group even increased its market share in the vehicle testing business from 74% in 2019 to 75.2% in 2020. In view of this, investors must be wondering what could be the underlying causes for the mystery slump of Vicom share price in 2021.
In my opinion, the problem with this counter is that most investors tend to overlook its other core business – the non-vehicle testing business. This is probably because Vicom’s vehicle testing is a public facing business while its non-vehicle insection business, Setsco Services Pte Ltd (SETSCO), provides services to the Construction, Marine and Process sectors. As Vicom provides services to the oil and gas industry, there was a strong correlation between the crude oil prices and Vicom share price.
Looking back, Vicom share price surged from $3 in 2011 to an incredible high of almost $7 in 2014. That splendid run of Vicom share price coincided with crude oil prices being traded at a mighty high of around USD100 per barrel post Great Financial Crisis era. Evidently, Vicom share price had ridden the wave of the crude oil boom.
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in Vicom before. Whether Vicom share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.
Vicom share price torpedoed
Analysing the outlook for Vicom share price is challenging because the Group has stopped [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]Lifetime Membership
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