SHAH ALAM - While other companies are struggling to pay overheads and stay afloat post Covid pandemic, Dagang NeXchange Berhad ("DNeX”) profits have grown with market capitalisation at RM3.5 billion as of March 1, 2022.
It morphed into a billion ringgit company in terms of market capitalization within a short time period.
Its share price has been one of the most active on Bursa Malaysia since last year and its revenue is estimated to hit above RM1 billion for the financial year ending June 2022 for the first time since inception. The profits will be huge, potentially hitting hundreds of million, according to analysts.
What makes DNeX thick and what sets it apart from the rest?
Entrepreneur-run company
A lesson learned from DNeX’s triumph amid pandemic is that the company seeks out change rather than waiting to adapt to change. The company is run by entrepreneurs. Thanks to the leadership’s entrepreneurial spirit, they knew how to put the company on the growth path.
They knew having to rely majorly on one business – National Single Window ("NSW”) – would not make the company sustainable. If any crisis were to hit the company for example, the government not extending the NSW contract to DNeX, the company would be in trouble. DNeX’s previous revenue was highly dependent on NSW contract.
The 40th United States President Ronald Reagan once said: "There are no great limits to growth because there are no limits of human intelligence, imagination, and wonder.”
This is true for DNeX. Why would a trade facilitation company acquire and have major control in a chipmaker and a boutique oil and gas producer? Successful entrepreneurs, or in this case the masterminds behind DNeX’s successful growth strategies, would rather ask a different question: "How best can we do it?”.
On 1 July 2021, DNeX completed the acquisition of an additional 60% stake in Ping Petroleum Ltd, to take its stake in the oil and gas company to 90%.
This makes Ping a subsidiary of DNeX Energy Sdn Bhd, a wholly owned subsidiary of DNeX. Ping has a portfolio of producing and developing O&G assets in the Anasuria Cluster located in the North Sea, UK in joint venture with Hibiscus Petroleum Bhd.
Later on 26 July 2021, DNeX completed the acquisition of 60% equity interest in SilTerra Malaysia Sdn Bhd ("SilTerra”) from Khazanah Nasional Bhd. DNeX is now the majority shareholder of SilTerra.
Getting the best people to work with the company
Hiring and working with the right people is one of the most important parts of building a successful company. Any proven successful companies out there with the likes of Petronas, Tenaga Nasional and Khazanah Nasional put great emphasis on talents.
DNeX knew it had to get the right people to do the job that it did not have experience in, like running a semiconductor and oil and gas businesses. This is why DNeX does not have entire control in those two companies it acquired. It has a strategic partner from China, Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (Limited Partnership) (CGP Fund), which is more experienced in the semiconductor business.
The same thing goes to Ping. DNeX maintained 10% equity stake for the founders of Ping because the founders were the ones responsible for the healthy profits in the past years.
Before the acquisitions, DNeX was also actively transforming its top leadership team with a goal of finding the best talents that could run and execute the company’s growth plans. It brought in among others Tan Sri Syed Zainal Syed Abidin Mohamed Tahir, who has extensive experience as a chief executive officer, to lead the top management team.
What’s next?
In the short and medium-term, DNeX’s priority might be focusing on growing SilTerra and Ping. Growth opportunities are still huge for both companies given the high semiconductor demand and high oil prices. DNeX also has huge cash resources and low gearing, which provides ample leveraging opportunity to fund its subsidiaries’ growth ventures.
It morphed into a billion ringgit company in terms of market capitalization within a short time period.
Its share price has been one of the most active on Bursa Malaysia since last year and its revenue is estimated to hit above RM1 billion for the financial year ending June 2022 for the first time since inception. The profits will be huge, potentially hitting hundreds of million, according to analysts.
What makes DNeX thick and what sets it apart from the rest?
Entrepreneur-run company
A lesson learned from DNeX’s triumph amid pandemic is that the company seeks out change rather than waiting to adapt to change. The company is run by entrepreneurs. Thanks to the leadership’s entrepreneurial spirit, they knew how to put the company on the growth path.
They knew having to rely majorly on one business – National Single Window ("NSW”) – would not make the company sustainable. If any crisis were to hit the company for example, the government not extending the NSW contract to DNeX, the company would be in trouble. DNeX’s previous revenue was highly dependent on NSW contract.
The 40th United States President Ronald Reagan once said: "There are no great limits to growth because there are no limits of human intelligence, imagination, and wonder.”
This is true for DNeX. Why would a trade facilitation company acquire and have major control in a chipmaker and a boutique oil and gas producer? Successful entrepreneurs, or in this case the masterminds behind DNeX’s successful growth strategies, would rather ask a different question: "How best can we do it?”.
On 1 July 2021, DNeX completed the acquisition of an additional 60% stake in Ping Petroleum Ltd, to take its stake in the oil and gas company to 90%.
This makes Ping a subsidiary of DNeX Energy Sdn Bhd, a wholly owned subsidiary of DNeX. Ping has a portfolio of producing and developing O&G assets in the Anasuria Cluster located in the North Sea, UK in joint venture with Hibiscus Petroleum Bhd.
Later on 26 July 2021, DNeX completed the acquisition of 60% equity interest in SilTerra Malaysia Sdn Bhd ("SilTerra”) from Khazanah Nasional Bhd. DNeX is now the majority shareholder of SilTerra.
Getting the best people to work with the company
Hiring and working with the right people is one of the most important parts of building a successful company. Any proven successful companies out there with the likes of Petronas, Tenaga Nasional and Khazanah Nasional put great emphasis on talents.
DNeX knew it had to get the right people to do the job that it did not have experience in, like running a semiconductor and oil and gas businesses. This is why DNeX does not have entire control in those two companies it acquired. It has a strategic partner from China, Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (Limited Partnership) (CGP Fund), which is more experienced in the semiconductor business.
The same thing goes to Ping. DNeX maintained 10% equity stake for the founders of Ping because the founders were the ones responsible for the healthy profits in the past years.
Before the acquisitions, DNeX was also actively transforming its top leadership team with a goal of finding the best talents that could run and execute the company’s growth plans. It brought in among others Tan Sri Syed Zainal Syed Abidin Mohamed Tahir, who has extensive experience as a chief executive officer, to lead the top management team.
What’s next?
In the short and medium-term, DNeX’s priority might be focusing on growing SilTerra and Ping. Growth opportunities are still huge for both companies given the high semiconductor demand and high oil prices. DNeX also has huge cash resources and low gearing, which provides ample leveraging opportunity to fund its subsidiaries’ growth ventures.