Dnex forms alliances for smart city projects

KUALA LUMPUR: Dagang Nexchange Bhd’s (Dnex) venture into the Middle East and North Africa (Mena) region is gaining momentum as it increases its access to technology solutions from China.

In an announcement yesterday, Dnex said it had entered into a joint venture with Zhongheguoji Construction Group Co. Ltd (CSI) to set up a JV enterprise (China JVE) to provide licenses and/or services to Chinese and international customers.

The JV also allows Dnex to access technology and solutions from China in areas of smart city and artificial intelligence solutions, among others.

The registered capital of the JVE amounting to RMB20mil (RM13mil) will be funded by internally generated funds.

Dnex will hold 60% stake of China JVE while CSI will own the remaining 40%.

According to Hong Leong Investment Bank (HLIB) Research, the venture is in conjunction with the objectives of Saudi Vision 2030 as the kingdom aims to implement smart city projects across cities such as Makkah, Riyadh, Jeddah, Al-Madinah and Al-Ahsa.

This is expected to allow Dnex to ride on the growing ICT spending in years to come from the kingdom.

Dnex had recently signed a JV with Ajlan & Bros Holding Group to form an equally owned JV to carry out systems integration in smart cities and large enterprise projects in the Mena region.

Additionally, DNeX also signed a collaboration agreement with both Ajlan & Bros and CSI to explore commercial opportunities in Saudi Arabia in offering smart city and other technology solutions.

“We are mildly positive on this development as Dnex is actively looking for avenues to expand its IT business by tapping its experience and expertise in serving the public sector in Malaysia.

“Should the venture come to fruition, Dnex will predominantly be responsible for providing the technical know-how and providing ICT infrastructures and subsequent maintenance works,” said the research firm.

HLIB maintained its “buy” call on Dnex with a slightly lower target price of 72 sen a share.