This article first appeared in The Edge Financial Daily on June 7, 2018

KUALA LUMPUR: Dagang NeXchange Bhd (DNeX) is upbeat about its prospects under the new Pakatan Harapan government that has pledged to be business-friendly, and says the group is set to continue expanding its business via planned initiatives, as well as exploring new opportunities.

The group is targeting a 20% growth in profit after tax (PAT) for the financial year ending Dec 31, 2018 (FY18), on a 30% revenue growth, which its group managing director Zainal Abidin Jalil told reporters yesterday would be driven by improved performance from its two core business divisions.

DNeX’s FY17 core PAT grew 76% year-on-year (y-o-y) to RM55.2 million from RM31.3 million in FY16 — after excluding a one-off recognition of negative goodwill of RM88.9 million arising from the acquisition of Ping Petroleum Ltd in FY16 — as revenue rose 14% y-o-y to RM204 million from RM178.4 million.

“We are well positioned for profitable growth and with our two core business divisions — IT and e-Services, as well as energy — we have a sustainable business model.

“DNeX is committed to create and capture new opportunities by leveraging on the company’s core competencies as well as pursue strategic investments,” Zainal said after the group’s annual general meeting (AGM).

The group is also eyeing a tender that it expects the government to call for implementation of the Road Charge Vehicle Entry Permit (RCVEP) project for the Malaysia-Thailand borders. “The new government will likely call for a tender for that, and we are getting ready,” Zainal said. The group was appointed the exclusive project consultant for the RCVEP project last year.

On the tender’s expected value, Zainal declined to speculate, saying only it may be different than that of the RCVEP system involving foreign-registered vehicles entering Malaysia via Johor, as the volume of cars crossing the Malaysia-Thailand border is lower.

The company secured the RM104.3 million contract last year to manage and operate the southern RCVEP system for five years. DNeX’s share price closed four sen or 8.75% higher at 43 sen yesterday, with a market capitalisation of RM764.53 million.