DNeX’s share price climbs to a 2-decade high

The firm’s shares have risen by 55 sen or 250% since the start of the year when it was priced at 22 sen


DAGANG NeXchange Bhd’s (DNeX) share price climbed to a near two-decade high of 77 sen yesterday as investors’ interest in the counter saw it become the most actively traded stock on the exchange with some 1.1 billion shares changing hands.

Its warrants were even more actively traded with 2.26 billion pieces exchanging hands, and together with the underlying shares accounted for about 23% of the 14.5 billion securities traded yesterday.

DNeX’s shares have risen by 55 sen or 250% since the start of the year when it was priced at 22 sen, and added some RM1.18 billion to its market capitalisation.

DNeX rose 22 sen or 40% higher yesterday to 77 sen, valuing the company at RM1.66 billion.

Company filings to Bursa Malaysia showed shareholder Azman Karim disposing of 600,000 shares in the last two months, reducing the amount of shares he owns to 101.95 million shares or equivalent to a 5.13% stake in the company.

Azman is the MD at OGPC Sdn Bhd, which has a stake in DNeX as a result of the issuance of new DNeX shares as part of the consideration of DNeX’s acquisition of OGPC Group in 2016.

DNeX’s share price rally came after it entered into a conditional share sale and purchase agreement (SSPA) for the proposed acquisition of the additional 60% stake in Bermuda-incorporated Ping Petroleum Ltd in January.

Its share rallied further after Khazanah Nasional Bhd accepted its bid as part of a consortium to acquire the entire stake of SilTerra Malaysia Sdn Bhd, for an undisclosed price.

On Jan 22, DNeX entered into an SSPA with Ping Petroleum’s shareholders to acquire an additional 60% stake in the latter for US$78 million (RM314.34 million).

The acquisition will be made by cash amounting to US$40.95 million, the allotment and issuance of up to 360 million new DNeX shares, and the allotment and issuance of new redeemable non-convertible preference shares in DNeX Energy based on the issue price of RM1 per relative price strength.

Previously, DNeX had planned to dispose 30% of its existing stake in the company which it acquired for US$10 million in 2015.

The acquisition is expected to be completed by the end of the second quarter of 2021 and will contribute positively to the group’s earnings.

Ping Petroleum holds an equal stake of the Anasuria Operating Company (AOC) with Anasuria Hibiscus UK Ltd, which is a wholly-owned unit of Hibiscus Petroleum Bhd.

AOC, which conducts the business of exploration, development and production of oil and gas, operates the Anasuria cluster, which is located 175km east of Aberdeen, in the UK North Sea.

For its financial year ending June 30, 2020, Ping’s revenue stood at RM204.07 million with total assets of RM1.53 billion.

On Feb 8, DNeX won the bid to acquire semiconductor maker Sil- Terra Malaysia priced at about US$150 million according to a Bloomberg report.

The loss-making SilTerra is a 200mm semiconductor wafer foundry, offering complementary metal-oxide-semiconductor (CMOS) fabrication processes for integrated circuits in advanced logic, mixed-signal and radio frequency and high voltage applications.

DNex, in a bourse filing last week, stated that acceptance of the bid is still subject to strict confidentiality with Khazanah and no further details of the bid can be publicly disclosed until the signing of the definitive agreement.

In its third-quarter ended Sept 30, 2020, DNeX’s net profit fell 59.4% year-on-year (YoY) to RM3.85 million from RM9.48 million a year prior due to the Movement Control Order which affected its operations.

Revenue was down by 18.5% YoY to RM50.5 million from RM62 million mainly due to lower revenue contribution from its IT segment.