DNeX to ride on global semiconductor demand

By ZAIDI ISHAM ISMAIL
editor@dagangnews.com

KUALA LUMPUR 2 August - Dagang NeXchange Berhad (DNex) has always been seen as a medium growth ICT firm by investors.

The company is not seen as a high growth heavy weight concern but it is not a pushover either.

But all that changed when the company led a consortium to buy foundry maker Silterra from Khazanah Nasional Berhad for RM470 million.

The deal was completed last week.

This has effectively propelled DNex as a formidable semiconductor player.

Moody Analytics said last week that the semiconductor shortage last year is expected to prolong until next year due to the pandemic.

"This is an opportune time for DNeX as semiconducor demand is hitting the roof as more and more people work from home compared at the office.

They will need to use various ICT platforms and this will push up demand for laptops, gadgets and computers

This in turn will boost demand for semiconductors used in laptops and gadgets," an analyst from Permodalan Nasional Berhad told DagangNews.com.

He added DNeX is smart for not putting all of its eggs in one basket.

"Its venture into Ping Petroleum was also a wise move to diversify its income in the future.

"Otherwise, DNeX could be in dire straits in the future if it focused too much on one type of business such as what is happening with aviation and tourism companies right now," said the source.

DNeX also announced last week its services to help government agencies with its digitalisation services which will augur well for its future income.

With its better prospects, DNeX should be able to register better earnings this year.

Oil prices are also surging at above US$70 per barrel and this will obviously augur well for its coffers.

The online boom and e-commerce is unlikely to end soon due to the spread of the new COVID-19 Delta variant.

DNeX did the right thing to expand given the uncertain times and this will give it a steady income in the future.

The petroleum segment will buffer the company at a time when the ICT segment may not be doing well.

The analyst added DNeX must also shed its image as a bidder of government projects and start vying for private sector projects.

Thus the business diversification is timely and will pay off in the future.

For as long as the online shopping thrives, so will demand for gadgets and laptops.

DNeX in turn via Siltera will continue to supply semiconductors for the electrical and electronics sector providing a solid income for the company. – DagangNews.com