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TA Sector Research

Author: sectoranalyst   |   Latest post: Tue, 5 Dec 2017, 09:15 AM

 

Dagang NeXchange Berhad - Expecting An Impressive 4Q17

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Review

  • Dagang NeXchange Bhd (DNeX) registered 9MFY17 core net profit of RM42.1mn (+57.8% YoY) which came at 66% and 69% of ours and consensus’ full year estimates respectively.
  • We deem this within expectations as we are expecting a spectacular 4Q underpinned by 1) better average crude oil price coupled with higher utilisation of Anasuria FPSO after scheduled turnaround, 2) one-off final payment of RM9mn from Malaysia-Singapore VEP-RC capex contract and 3) more deliveries of portable container systems to Petro Teguh.
  • 3QFY17 core net profit increased 24.9% QoQ and 14.0% YoY to RM14.9mn on the back of 1) higher contributions and better margins in the IT segment and 2) EBIT level turnaround at Energy segment despite the decline in revenue.
  • IT segment revenue improved due to higher contributions from the eWork permit, trade facilitation and VEP-RC businesses. However, revenue from energy declined as progress billing from Petronas Carigali slowed down.
  • Associate contributions, i.e. Anasuria cluster improved 11.1% QoQ but fell 34.6% YoY. As mentioned, the scheduled turnaround in September did not impact earnings as seen from the QoQ increase. For the YoY decline, we understand that this was due to reopened sour wells resulting in a surge of production during the last 2 quarters of FY16.
  • No dividend was declared for the quarter under review.

Impact

  • Maintain earnings forecasts.

Outlook

  • We understand that DNeX is looking to acquire a similar oil field to Anasuria cluster. If this materializes, bottomline would be boosted significantly. DNeX is in an ideal position to acquire new assets given its net cash position and robust free cash flow.
  • There is huge growth potential for the VEP-RC system going forward. We believe DNeX is the frontrunner to secure the capex and opex portion for the Thai border given its industry expertise. Additionally, there may be other applications for its RFID (radio frequency identification) technology such as multiflow lanes.

Valuation

  • Our TP remains unchanged at RM0.75 based on SOP valuations. Maintain BUY on DNeX as in our opinion, it expanded into the O&G sector at the right time.

Source: TA Research - 22 Nov 2017

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Labels: DNEX

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Chart Stock Name Last Change Volume 
DNEX 0.455 -0.005 (1.09%) 8,507,900 

  Be the first to like this.
 
Tai KT netx also potential
23/11/2017 11:32
andrewong Dnex looked great to go to 0.50 by middle of dec
24/11/2017 00:15
leslieroycarter https://klse.i3investor.com/blogs/taresearch/138956.jsp
24/11/2017 16:18
very_goat .
No project
No merger
No acquisition
DNEX only have dream plan

TP Dec 2017 -- Mom 0.35 & Son 0.14
TP Jan 2018 -- Mom 0.32 & Son 0.12
TP Feb 2018 -- Mom 0.30 & Son 0.11

Wish our dream come true, so that everyone can invest in DNEX !!!

BIG DREAM, BIG GAIN !!!

Ha Ha Ha Ha !!! Yeah !!! Cheers !!!


Top 30 Shareholders % non-stop decreasing : -

Apr -- 58%
Aug -- 56%
Sep -- 55%
Nov -- 52%

CENSOF ↓
AZMAN BIN KARIM ↓
ABDUL MANAF BIN SHARIFF ↓
KHOO KOK SENG ↓
28/11/2017 20:57
potentials kgroup,Inix,mmag,Puc this few sen potential reach TP 20 sen
05/12/2017 16:16


 

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