• Morphing into something bigger from ICT to energy. DNEX (formerly known as TIME), was primarily an ICT provider. In recent years, the group has diversified into the energy sector as its 2nd core business. Valuation is undemanding at 8.8x FY18 P/E, supported by 34% earnings CAGR from FY15-18.
• ICT business. The group’s core business is still being anchored by bread and butter National Single Window (NSW) which has seen its contract being renewed by the government for another 2 years to Sep 2018. DNEX is looking to potentially increase its ICT earnings base significantly by providing the Vehicle Entry Permit (VEP) and Road Charges (RC) system Project for the Ministry of Transport, Malaysia in the Johor-Singapore border with 2 major revenue streams: CAPEX (RM45m) and OPEX maintenance (RM20m p.a). If the project is successful, the VEP software solution could be replicated on Thailand-Malaysia border also which could bring about additional income streams.
• Energy venture. To recap, the group acquired OGPC, an equipment provider for O&G industries covering the whole chain from upstream to downstream in 2014. Subsequently in 2015, DNEX has also invested in 30% stake of Ping Petroleum, an E&P company at its early stage with 50% stake in Anasuria Cluster, North Sea jointly-owned with Hibiscus Petroleum. Post several cost cuts and optimization, the mature oilfield is now cash flow positive while providing further income for DNEX at associate level.

Source: Hong Leong Investment Bank Research - 21 Oct 2016