OPCOM - OVEREXUBERANCE OR FACT

Recently, the National Fiberisation and Connectivity Plan (NFCP) was proposed by the Ministry of Communications and Multimedia, with the Cabinet approving the plan to improve nationwide connectivity. The NFCP will require an investment of RM21.6 billion over 5 years (2019-2023). Between RM10 billion to RM11 billion will be provisioned from the Universal Service Provision (USP) Fund, and the rest will be funded commercially.
 
This lead to speculation that certain IT companies would be involved and benefit from this massive project. One of them is Opcom, an ace market stock controlled by Mukhriz Mahatir, the son of our Prime Minister. This adds to the excitement of the counter.
 
Opcom Holdings Bhd is a Malaysian based investment holding company engaged in the manufacturing of fiber optic cables and cable-related products. The business activity of the group is functioned through Manufacturing, Trading and Engineering Services, and Other Operations segments.It has a capital of 161 million and is trading at 73 cents recently.
 
The news of the IT infrastructure project has moved this stock from the price of 40s to 70s. That is great isnt it? Would it able to scale higher?
 
Lets examine it carefully.
 
1. This counter has been losing money for the last 4 quarters
2. This smallish company is not likely to have the technology for 5G capabilities
3. PH government has always emphasize on open tenders for contacts
4. With such a big investments, Malaysia would have world wide manufacturers knocking on his door.
5. Maybe Telekom might even used Huawei (5G) recommended suppliers from China
6. Lastly worse of all, Mukhriz is seen selling down on his shareholdings, a good opportune time for him?
7. Given our PH government record roll out of the project might be at a mighty turtle speed.
 
 
Myth or Fact?
 
 
 
 
 
 
 
 
 

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