PETALING JAYA: E-commerce service provider Dagang Nexchange Bhd (DNeX) is among two companies which have submitted their tender to link up their service with the Customs’ new framework.
“DNeX has submitted its tender to be one of the service providers. We are still waiting for the results. Hopefully, we will be appointed,” said executive director Datuk Patrick Wong. The company is formerly known as Time Engineering Bhd.
He explained that its software, myCargo2U was ready to be linked to the Customs’ framework and boost a client base of 300. It was conducting roadshows to attract more customers.
DNeX’s concession for the implementation of National Single Window (NSW), which currently accounted for bulk of the group’s revenue was extended for more two years until Sept 24, 2016.
Wong said the uCustoms system framework would be replacing the NSW.
The uCustoms system is targeted to be rolled out in January 2016.
uCustoms is expected to link all government agencies such as permits issuing agencies, port authorities, free zone authorities and marine department involved in trade, chambers, ports and all parties involved in logistics.
Working backwards, Wong told StarBiz the new framework should be up for run and testing by October in view of the expiry of the concession in September 2016.
Nonetheless, Wong said the myCargo2U was already a “back up”. He said the all-in-one solution for cargo and trade management could be linked to the new framework allowing freight forwarders to submit their documentations among others.
Wong said myCargo2u offered end-to-end services for cargo and trade management from the point of data entry to pre-declaration, declaration and post-declaration services to forwarding agents, freight forwarders, exporters and importers.
Being an incumbent in the industry, he hoped to secure 80%-90% of the 5,000-6,000 freight forwarders in the market to use its service.
“We are planning to launch myFreight2Cash for customers needing help to do settlement. This will be launched in the third quarter of this year,” Wong said, adding that it would be working with financiers for that payment facility.
He said DNeX services were focused on the business-to-business segment.
With new services in place, Wong believed it would help the company to grow and bring this to Asean markets including Indonesia and the Philippines.
However, the main focus will be in the domestic market.
“Before we attack, we better defend and be a king in our own territory. There are many opportunities for us here. Operationally, it is not easy to go overseas,” Wong said.
He said that DNeX had a “healthy margin” with a gross profit margin at 70% for its ICT business and net margin of 20%.
He said the margin was a norm in its software business.
“We are trying to improve our net margin so that it will reach between 30% and 35%,” Wong said.
DNeX has recently ventured into the energy and oil and gas industries for long-term investment.
DNeX expected its proposed acquisition of a 51% stake in Forward Energy Sdn Bhd and the entire equity interest of OGPC Sdn Bhd and OGPC O&G Sdn Bhd, a provider of equipment and services for oil and gas, petrochemical and power industries to contribute to the group.
DNeX had undergone a transformation to become leaner and stronger. It had a staff rationalisation exercise and retrenched 50 employees.
“We used to have 250 workers and now we have 70 people in the information technology department, 50 people managing careline, 50 people in operations and 20 in management. We are keeping it lean.
“That’s why we did a voluntary separation scheme (VSS),” Wong said.
The exercise has dented its first quarter results.
In the first quarter ended March 31, DNeX posted a net profit of RM467,000 compared with RM1.93mil due to a one-off expense for its staff rationalisation exercise.
Its revenue for the quarter grew 18% to RM21.9mil from RM18.6mil a year ago, contributed by growth in its business-to-government business and progress billing for the provision of professional services for the implementation of the goods and services tax integrated logistic portal.
Wong expected the following quarters to be better. He said there would be a small one-off payment for its VSS exercise in second quarter.
He said although its business volume was expanding 5%-6% month-on-month, it hoped to continue growing the business.
On its share price, Wong said: “I don’t control the share price. If you are RM500mil and below in market capitalisation, funds won’t come to you.
“That’s our problem. Our market capitalisation is only RM200mil,” he added.
DNeX closed 25.5 sen last Friday. It is currently trading at a price earnings ratio of about 18 times.
Wong said the group has no debt and has a healthy balance sheet with net cash of RM70mil.
