To The Moon

Technical Analysis (TA)

The chart shows a strong bullish momentum that has accelerated over the last quarter. $VICOM LTD(V01.SI)$

• Moving Averages (MA):  The short-term MA (pink/blue lines) is well above the 200-day long-term MA (green line), which is currently trending up at $1.637. This indicates a sustained long-term uptrend.

• Price Action: The stock is trading at $1.82, a multi-year high. It has successfully cleared previous resistance levels at $1.50 and $1.65.

Support & Resistance: * 

• Resistance: Immediate psychological resistance at $1.90 - $1.92 (marked by  horizontal line).

• Support: Immediate support lies at $1.78 (50-day MA area). A strong historical floor is now established at $1.64.

• Momentum: The recent sharp "leg up" suggests high buying interest, likely tied to the strong FY2025 earnings report released in February.

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Fundamental Analysis (FA)

‌VICOM’s recent financial performance has been exceptional, but it contains a "one-off" element you should note.

• Earnings Surge: For FY2025, VICOM reported a 45% jump in net profit to $42.5 million. This was largely driven by the ERP 2.0 OBU (On-Board Unit) installations, where VICOM was a major partner.

• Dividend Profile: * Final Dividend: A final dividend of $0.053 has been declared (Ex-date: April 29, 2026; Payment: May 8, 2026). Total Yield: Including the interim dividend, the total FY2025 payout is $0.084, representing a trailing yield of roughly 4.6% - 4.7% at current prices.

• Balance Sheet: The company remains rock-solid with zero debt and a high Return on Equity (ROE) of 28.1%.

• Valuation: The P/E ratio has expanded to approximately 27x, reflecting the market's willingness to pay a premium for its defensive nature and recent growth spurt.

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Future View: The Singapore Business Outlook

‌As we move into mid-2026 and 2027, the narrative for VICOM is shifting from "OBU growth" to "Industrial diversification."

‌1. Normalization of Vehicle Inspection

The OBU installation windfall will taper off in 2026 as the mandate nears 100% completion. You should expect revenue in the vehicle segment to stabilize back to its "steady-state" growth, which is linked to Singapore’s vehicle population and COE cycles.

‌2. The Jalan Papan Hub (Non-Vehicle Testing)

This is the major growth catalyst. The new integrated testing hub at Jalan Papan is expected to be fully operational in the second half of 2026. This expands VICOM's capacity for:

• EV Testing: As Singapore pushes for full EV adoption by 2040, VICOM is positioning itself as the primary authority for complex electric drivetrain and battery inspections.

• Industrial Testing: Strengthening its "SETSCO" arm to provide testing for the aerospace, construction, and food industries, which are higher-margin and less regulated than vehicle inspections.

3. Defensive Play in a Volatile Market

With interest rates expected to plateau or dip slightly in 2026, VICOM remains a "bond-proxy" favorite for Singapore investors due to its consistent 70% dividend payout policy and monopolistic position in the inspection market.

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Summary Verdict: 

Technically, the stock is overbought in the short term, and a consolidation toward $1.75 - $1.78 wouldn't be surprising after the ex-dividend date. Fundamentally, it remains a "Blue Chip" defensive play, though 2026 earnings may appear "flat" compared to the high base set by the OBU project in 2025.

Kenny Loh is a distinguished MAS Private Wealth Advisor (RNF: LKK300389588) representing Financial Alliance with a specialization in holistic investment planning and estate management. He excels in assisting clients to grow their investment capital and establish passive income streams for retirement. Kenny also facilitates tax-efficient portfolio transfers to beneficiaries, ensuring tax-efficient capital appreciation through risk mitigation approaches and optimized wealth transfer through strategic asset structuring.

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