DNEX (4456) - DNeX - Fast Growing Company like MyEG
Highlights of DNEX Core Business :
http://www.dnex.com.my/
1. National Single Window (NSW)
DNeX is the single exclusive operator of the NSW platform, providing trade facilitation services to the Royal Malaysian Customs Department for over 25 years. Malaysia’s first, largest and most established e-transaction exchange. The exchange serves over 13,000 users in the trade facilitation and logistics fraternity. More than 50 million electronic transactions and RM 1.8 billion worth of Customs duty payment are transacted annually through its robust infrastructure. The service charges imposed by DNeX are at 75 sen per kilobyte for government agencies, 80 sen per kilobyte for the private sector and RM5 for each approved permit and certificate of origin application.
==> Monopoly business and sole operator. A lot of Malaysia imports and exports figures and data will pass through here, might be benefited when import and export figure increases but no strong growing eps generated yet, more to recurring income.
2. myCargo2U
Malaysia’s first all-in-one solution for cargo and trade management. Targeted at Forwarding Agents, Freight Forwarders, Exporters & Importers, myCargo2U offers end-to-end services for cargo and trade management from the point of data entry to Pre-Declaration, Declaration and Post-Declaration services. myCargo2U enables real time visibility, analytics and management of cargo, its data and related cross-border business-to-government documentation within the supply and fulfillment chain.
==> Ok, logistics related business.
3. RFID technology
DNeX RFID’s business operations are focused on research and development, design, manufacturing and trading of radio frequency identification (“RFID”) technology, security system and related equipment.The company’s offerings include RFID Warehouse Management System that enables customers achieve real-time visibility of inventory and warehouse operations, and Certificate Management System that provides high security protection of certificate and authentication features for enforcement personnel and public consumer to perform checking and confirmation of authenticity of the certificate effectively and efficiently.
==> Nothing special as i dont know what is this.
4. Global Halal Exchange (GHX)
GHX eMarketplace, an offering by DNeX, provides access for merchants and business listings to the USD2.3-trillion Halal market globally. Global Halal Exchange provides a convenient electronic hub which enables suppliers of Halal products and services to reach the global market easily. Through globalhalalexchange.com, suppliers will experience great accessibility and transactional ease through features and services that will help you get your product to market as quickly as possible, including setting you up with online tools to make your business run smoothly.
==> New business and idea in Malaysia i guess, no figures yet.
5. Vehicle Entry Program (VEP) & Road Charges (RC)
The contract involves setting the system for the government to register foreign vehicles entering the southern border of Peninsular Malaysia and charge RM20 for every entry. Subsequently, DNEX is aiming to secure the maintenance contract for the system installed, which could potentially generate recurring income. Road Transport Department estimates that 60% of the 1m vehicles that enter and leave Malaysia through the two entry points in Johor each month (in July-Aug 2016) are Singaporean vehicles. According to a news report by Channel News Asia, the Public Works, Rural and Regional Development Committee Chairman Mr Hasni Mohammad said that about 120k Singaporean vehicles were registered under the VEP system as of Jun 2016. Management believes that the VEP project will be implemented at the other 12 road entry points to Malaysia in stages.
==> The one and the only one business in Malaysia, nobody else get it. SWOT analysis sure win.
==> 600K vehicles from singapore each month x RM20 = RM 12million per month and RM144million per year with very high profit margin income to government.
==> Dnex so far only get one time contract to build the system & perhaps maintenance contract, but it is possible that government will allow Dnex some sharing in the RM20 as maintenance fee.
6. OGPC
The principal activity of OGPC is the provision of engineering and technical support services. Over the years, OGPC has established itself as a supplier and service provider for specialised equipment and parts, including heating systems, compressors, pumps, flange, valves, flares, filters, as well as technical support services, including offshore services (principally for the oil and gas sector). Other markets for OGPC products and services are the petrochemical, energy and industrial sectors. OGPC’s competitive advantage is strong engineering and technical capabilities that enable it to bundle different types of equipment into one package by fabricating the equipment into integrated solutions, such as loading arm systems, heating systems and flare systems. Management is optimistic that OGPC will maintain average historical net profit of about RM20m.
== > rights issue to buy this oil and gas stable and recurring income perviously.
7. Drilling contract by Petronas
DNeX Oilfield Services (DOS) was awarded a 3-year umbrella contract in Apr 2016 for the provision of directional drilling, measurement and supply of equipment services from Petronas Carigali worth US$70m. The contract period is Aug 2016-Aug 2019. We understand that DOS is the only local service provider that was awarded such a contract. The three other service providers that were awarded such a contract were international players Schlumberger, Haliburton and Baker Hughes. In 2015, DOS purchased the necessary drilling equipment from Baker Hughes for US$4.2m (RM15m) in order to tender for the Petronas umbrella contract. Management estimated that the size of the local market for drilling services is about US$200m (RM800m) per annum. Furthermore, management indicated that DOS is in the midst of bidding for a second contract with Petronas Carigali.
==> exclusive contract given by Petronas, nothing special about this business but generating income in USD, currency gain as contract is signed in 2016.
8. Ping Petroleum
Ping Petroleum (Ping), an independent upstream service provider that focuses on shallow water offshore production and development in Southeast Asia and the North Sea. Ping and Hibiscus Petroleum each own 50% of the Anasuria Cluster, which is located in the North Sea. Management expects an annual contribution of about RM18m from Ping, based on crude oil price assumption of mid-US$40s per barrel.
==> Contribution from Ping should be increased due to roughly 10% weaker Ringgit and 25% higher oil price in 2017. Hibiscus share price has been almost tripled from RM0.2 to highest RM0.56 and trading at P/E ??. Dnex oil and gas part P/E is trading at low.
9. eWork Permit System (WPS)
Dagang NeXchange Berhad (“DNeX”), through subsidiary company MyCall Gateway Sdn Bhd, has been appointed as the Service Provider for the provision of eWork Permit System.The appointment is from Bukti Megah Sdn Bhd that operates the One Stop Centre for recruitment and management of foreign workers under the purview of the Ministry of Home Affairs of Malaysia.Under the contract, DNeX will provide consultancy, advice and services as the Technology Partner and Solution Provider for the eWork Permit System for the rehiring programme of illegal foreign workers undertaken by Bukti Megah involving foreign workers without permits from 15 countries. The contract is effective for a period of one year from 15 February 2017 and will be automatically renewed on a yearly basis unless the contract is terminated. Bukti Megah will pay a service fee of RM30.00, subject to six per cent of Goods & Services Tax, to DNeX for each transaction of eWork Permit.
==> According to the Human Resources Ministry, there are some 2.1 million registered migrant workers - what we call legal foreign workers - in Malaysia. However, the number of overstaying illegal foreigners is even larger, probably around three million.
==> On Feb 18 this year, Human Resources Minister Richard Riot Jaem travelled all the way to Dhaka to sign a memorandum of understanding with the Bangladeshi government for an additional 1.5 million workers over the next three years. This decision has since met with powerful objection from the Malaysian public.
http://www.straitstimes.com/opinion/the-dilemma-of-having-foreign-workers-in-malaysia
==> This is a monopoly business which is previously only by MyeG is now shared with DneX. So, we assume a million workers with RM30 is about RM30m with gross profit margin of 70-80%(MyeG) maybe, the numbers are huge to Dnex n a long run.
==> Myeg trading at P/E ?? now. OMG.
==> Trading volume shoot up yesterday because of this contract i guess which caught my attention.
source : compile from online resources and research reports.
Chart : Trying to break its high.
Disclaimer : Informational purpose only.
DNEX (4456) - DNeX - Fast Growing Company like MyEG
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