Jovi Ong asked 4 months ago
Vicom used to be such a dividend darling.  However, the business has not grown much in recent times.  I was looking at the payout ratio and it is so high.  Is it a cause for concern? Thank you!
3 Answers
Rusmin Ang Staff answered 4 months ago
Hi Jovi, Valuation for VICOM was high in the past which I believe lead to the correction. Their payout now is a lot better which is less than 100% versus in 2019 where it was more than 150%. So DPS should be more sustainable moving forward but their vehicle inspection business may be under threat since SG is moving toward electrification which requires less inspection. This is an area to ponder if you're looking at VICOM
Jovi Ong replied 4 months ago

That’s a very good insight. Thank you very much!

Kenneth Lee answered 3 months ago
Hi Rusmin, What is you thought, if the vehicle business is still resislence? The current regulation is treating EV the same as petrol power cars, yearly inspection after 3 years, at the same charges. Also the roll put of EV is unknown, with major car plants delaying their development, and low take up rate from consumer.   Apart from the vehicle business, VICOM wanting to expand their testing services, but I couldn't get a sensng on the growth from their Aunnual Report. I am asking as I am having some VICOM shares and deciding whether to continue keeping them.  
Rusmin Ang Staff answered 3 months ago
Hi Kenneth, For now, VICOM's vehicle inspection look safe since EV fees are similar to ICE cars. Their main growth should come from the price increment which depends on the inflation. Government intends to phase out ICE cars by 2040 and by then, the landscape could be different. The risk will be changes to the fees and frequency of inspections once we have more EVs on the road. VICOM seems fairly value now.