Dagang Nexchange (DNeX) (former Time Engineering)

[winston]

vested

Dagang NeXchange (DNEX MK)
Reaping Fruits; Spearheading Growth Vertically And Horizontally

DNeX, which started off a clean slate with the emergence of new management
alongside strategic acquisition in SilTerra and Ping Petroleum, is seeing the fruits of its
labours.

Beyond the earnings-accretive acquisitions, the group is spearheading growth
vertically and horizontally with its star-performing technology and oil & gas segments.

DNeX is trading at an undemanding 12.0x FY23 PE (consensus) - the cheapest listed
technology stock with state-of-the-art capabilities.

Source: UOBKH

https://research.uobkayhian.com/content ... 7d72f41e8a

[winston]

vested

DNeX signs MoU with Cerulean Winds for offshore wind turbine project

KUALA LUMPUR: Dagang Nexchange Bhd's subsidiary Ping Petroleum UK PLC has entered into a memorandum of understanding (MoU) with Cerulean Winds Ltd to explore a collaboration in delivering a dedicated offshore floating wind turbine for the Avalon Development in the Central North Sea, UK.

In a statement, DNeX said the parties plan to establish a joint venture company to deploy and operate the floating wind turbine, which will power the Sevan Hummingbird Floating Production Storage and Offloading (FPSO) vessel acquired by Ping in early July this year.

"Ping aims to connect the FPSO to a dedicated floating offshore wind turbine to power the facility thus minimising diesel and fuel gas usage as well as associated Greenhouse Gas emissions in the UK waters.

With a total estimated recovery of 23 million barrels of oil, production from the Avalon field is expected to come on stream by mid-2025.

Source: The Star

https://www.thestar.com.my/business/bus ... ne-project

[winston]

not vested

Technical tracker - HLIB Retail Research –2 Aug 2022

DNEX: Rough diamond

Undemanding valuation. Weighed by the global technology stock sell-down and the imposition of an additional 25% windfall tax to oil and gas producers in the British North Sea, DNEX share price has corrected 38.3% from a 52-week high of RM1.33 to RM0.82 yesterday.

With this, DNEX is currently trading at an undemanding 11.9x FY23 P/E, which is 65% lower than KLTEC’s 5-year average of 34.2x. This discount is unwarranted in our view, given DNEX being the only listed-co on Bursa Malaysia involved in both E&P and wafer manufacturing (Oil+Tech proxy). As such, we advocate buying on dip with a fair value of RM1.69.

Growth remains intact. While the additional 25% windfall tax to oil and gas producers in the British North sea will impact Ping Petroleum in the way of higher tax expenses, the impact will be partially offset by the new 80% investment allowance (#Figure1; source).

On top of that, factors such as higher oil prices (upcoming review period average: USD112 vs 2QFY22 realized prices: USD103.1) and the depreciating ringgit (upcoming review period average: 4.35 vs 3QFY22: 4.19) will partially offset the higher taxes as well.

On Siltera, ASPs per mask layer is anticipated to stay on a rising trajectory, and management expects it to hit USD25 by the end of 2022 (vs 3QFY22: USD23.6) due to the ongoing chip shortage. Thus, after considering the abovementioned factors, we think DNEX is on track to post commendable earnings.

In the next couple of years, we are even more excited and upbeat about DNEX’s prospects, underpinned by:-
(i) the commercialisation of the Avalone field and
(ii) Siltera’s new capacity kicks in.

The former will quadruple Ping Petroleum’s current output in FY25, while the latter will increase Siltera’s capacity to 10m mask layers in FY23 (from 8.8m mask now) for emerging technology whose ASPs is 3x higher than their core products. All in, we are projecting DNEX’s core net profit to register a strong FY22-24 CAGR of 18%.

Pending a rectangle breakout. Technically, DNEX is poised for a rectangle breakout after hovering near its strong support area of RM0.75-0.76. A successful breakout above RM0.83 will spur the prices toward RM0.91-1.00-1.10 level, creating a new uptrend leg. Cut loss at RM0.70.

Collection range: RM 0.76-0.78-0.82

Upside targets: RM 0.91-1.00-1.10

Cut: RM 0.70

[winston]

not vested

DNeX to build a 12-inch wafer fabrication facility in Malaysia

In the fourth quarter ended June 30, 2022 (4Q), Dnex posted a net profit of RM160.59mil on revenue of RM430.29mil.

For FY2022, DNeX said it generated a strong net cashflow from operating activities amounting to RM643.8mil.

Profit after tax of RM707.3mil and revenue of RM1.44bil.

Source: The Star

https://www.thestar.com.my/business/bus ... n-malaysia

[winston]

not vested

Dnex in for another strong year

On the back of Malaysia Silterra Malaysia Sdn Bhd’s increasing product average selling prices (ASPs), rising wafer shipments and Silterra’s capacity expansion by an additional 10%, slated for completion in early 2023.

Elevated crude oil prices and improved production and off-take volumes from Ping Petroleum Ltd’s Anasuria asset with the replacement of its subsea riser, scheduled in September 2022.

“In the medium term, Dnex’s growth will also be underpinned with its new Avalon greenfield, up and coming in mid-2025 (FY26), which would potentially quadruple Ping Petroleum’s current output, and its recent memorandum of understanding with Foxconn to develop a new 12-inch wafer fab to support its electric vehicle ventures.

CGS-CIMB Research expects Dnex to register another strong year ahead with a 16% core net profit growth on the back of higher wafer ASP on increasing mask layer and robust utilisation at Silterra, backed by its three long-term agreements.

Source: The Star

https://www.thestar.com.my/business/bus ... trong-year

[winston]

not vested

Aug 30, 2022

Record-breaking performance in FY6/22

FY6/22 core NP beat our and consensus’ expectations by 7% due to betterthan-expected sales from the energy and technology divisions in 4QFY6/22.

We project another strong performance in FY6/23F driven by higher wafers
ASP, higher production volume at Ping and favourable forex.

Retain Add recommendation with a lower RM1.50 SOP-based TP.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... E5CB5DE6E8

[winston]

not vested

DNeX’s one-third market value wiped off on dispute with Chinese partner over SilTerra

by Shazni Ong

The point of contention is whether prior approval is needed from the Ministry of International Trade and Industry (MITI) for the proposed investment.

MIMAS is of the view that such approval was not required and maintains that the shareholders agreement and subscription agreement, both dated Jan 21, 2022, are valid and enforceable.

However, DNeX disagrees.

“Vide MITI’s letter dated Feb 28, 2022, DNeX and CGP learned that prior approval from MITI was required in relation to the proposed investment,” said DNeX in the filing.

“DNeX and DNeX Semi consider such approval as necessary, more so in light of the terms and conditions of the shareholders’ agreement and subscription agreement which provide for MIMAS becoming a shareholder upon issuance of the ICPS and not their conversion. If so, this puts the [manufacturing] licence, and thus the operations of SilTerra, at risk.”

Source: theedgemarkets.com

https://www.theedgemarkets.com/article/ ... r-silterra

[winston]

not vested

1Q Results

Revenue: +55%; RM 420m
EPS: -87%
Net Asset: 0.62

https://www.bursamalaysia.com/market_in ... id=3309675

[winston]

not vested

Nov 28, 2022

A bumpy ride ahead

1QFY6/23 core net profit was below expectations, at 18% of our/consensus’
full-year NP forecast, due to softer-than-expected volume loading at SilTerra.

We expect higher production volume at Ping following completion of
debottlenecking exercise to cushion the near-term softer loading at SilTerra.

We cut FY23-25F EPS. Reiterate Add, with a lower RM1.00 SOP-based TP.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 39E407F5CC

[winston]

vested

DNeX inks two production sharing contracts with PETRONAS

The first PSC is for the development and production of oil and gas resources in the Meranti cluster located 80km offshore Kuala Terengganu.

The second PSC is for the development and production of oil and gas resources in the A Cluster located 290 km off the coast of Miri, Sarawak, offshore Malaysia.

The total development cost for the two clusters will be determined after the development concepts have been finalised.

Source: The Star

https://www.thestar.com.my/business/bus ... ti-cluster