THE STOCK chart of IEV Holdings is not pretty.
From 47 cents about a year ago, the stock line keeps coming down and touched as low as 26.5 cents last month (May).
IEV Holdings Limited provides engineering solutions to the oil and gas industry, and is adding renewable energy as a core business. It recently started constructing a biomass plant in Vietnam.
IEV (29 cents) has a market cap of S$55 million and no dividend yield.
Chart: Bloomberg
A couple of developments could perk up investor interest in this stock which came to our attention after a reader highlighted it in our forum.
1. After a full-year of RM3.6 million loss in 2013, which was its second successive year of losses, 1Q of this year saw a profit RM2.2 million. (See company's financial statement here)
President, CEO and founder Christopher Nghia Do.
Photo: Company
Non-executive chairman Hari Govindasamy. Photo: Company2. Insider buying: CEO Christopher Nghia Do and 2 directors have picked up a total of 3.4 million shares since Sept 2013.
The CEO has bought 340,000 shares since Oct last year.
He was outdone by Tan Sri Dato' Hari N. Govindasamy, Chairman and Non-Executive Director, who bought 2 million shares in one fell swoop in Sept 2013.
Dato' Hari paid the highest price of 41.3 cents among the 3 directors, the third being independent director Harry Ng who bought 100,000 shares in May 2013 at 27.5 cents apiece.
Dato' Hari has a total interest of 19.33% in the company (36.571 million shares), with 31.071 million shares being held by his wife, Puan Sri Datin Vimala J Govindasamy.
On the negative side, a substantial shareholder, Value Capital Asset Management, sold 1.405 million shares at 27.49 cents apiece on 27 May.
This was its first sale -- a painful decision it must have been -- since it acquired 10.8 m shares in June 2013 at 41.3 cents apiece through a placement of new shares by IEV.
The share sale resulted in a loss of about S$200,000 for Value Capital, which has ceased to be a substantial shareholder as its stake has fallen from 5.71% to 4.97%.
It's surprising to see a fund deciding to sell within a year at a loss and while the market may view the transaction as being a negative for IEV, the real reason may have to do with the fund deciding to deploy its cash to capture new opportunities, etc.
For its part, IEV Holdings has a couple of things going for it.
In April, it announced that its subsidiary, PT IEV Gas, has entered into two separate Gas Sales Agreements to supply compressed natural gas to two divisions of PT Indofood CPB Sukses Makmur Tbk in Padalarang, Bandung for a period of 12 and 24 months, respectively.
IEV said revenue from the agreements will be in excess of USD 9 million and is expected to contribute positively to IEV’s financial performance over the 2-year period from March 2014 to February 2016.
Then in May, it completed the sale of its stake in CNG Vietnam for S$10.7 million cash, or an excellent return of 346%.
The cash has been earmarked for its gas projects in Indonesia, working capital and its biomass plant in Vietnam. (See company announcement)
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