DNeX, HeiTech Padu, Theta Edge shortlisted for NIISe project

TheEdge Mon, Mar 04, 2024 04:30pm - 1 month View Original

This article first appeared in The Edge Malaysia Weekly on February 26, 2024 - March 3, 2024

THREE companies — Dagang NeXchange Bhd (DNeX), HeiTech Padu Bhd and Theta Edge Bhd — are understood to have been shortlisted for the National Integrated Immigration System (NIISe) project, which is set to integrate the border management systems under the various agencies of the Ministry of Home Affairs.

It is understood that the three were called for a tender briefing mid-last week, indicating that they have been shortlisted from more than 10 companies that submitted proposals for the project, which should be valued at below the RM1 billion mark.

“Now, the three have until end-March [March 26] to submit their firm proposals. I expect consortiums to be formed, even joint ventures with those [more than 10] companies that have been eliminated, as the project size is quite big. And, realistically speaking, no party would take on the contract and such risks alone,” one source familiar with the tender briefing says.

The NIISe contract involves the integration of data from 13 modules of the existing border control system, including the foreign workers segment, advanced passenger screening system, facial and fingerprint biometrics, professional visit passes, passports and travel documents, among others. While the actual value of the project is still uncertain, Iris Corp Bhd was awarded the same project in January 2021 for RM1.16 billion, but was terminated in August last year. Iris Corp’s initial contract was for a period of 54 months commencing March 1, 2021, to Aug 31, 2025, but it received a year-long extension to Aug 31, 2026.

How much of the contract has been completed, or whether the winning bidder will start afresh or take over from where Iris Corp left off, is not known. Iris Corp is alleged to have been behind schedule, and said to be having difficulty with the timelines.

To recap, the NIISe contract came about after the RM3.5 billion Sistem Kawalan Imigresen Nasional project was won by Awanbiru Technology Bhd (then known as Prestariang Bhd) in August 2017. However, it was terminated by the Pakatan Harapan government in December 2019.

In January 2021, during Tan Sri Muhyiddin Yassin’s administration, Iris’ unit Iris Information Technology Systems Sdn Bhd received a letter of award for the NIISe project from the home ministry. Under Iris, the contract was valued at RM1.16 billion, considerably cheaper and in line with the government’s austerity drive.

For the latest round of bidding, The Edge had reported early this month that other companies that had submitted proposals include Datasonic Group Bhd, Scicom (MSC) Bhd, Bestinet Sdn Bhd, MyEG Services Bhd, Microlink Solutions Bhd, Infomina Bhd, REDtone Digital Bhd and Sapura Group.

Another source who is aware of the three companies being shortlisted says that, initially, there was some speculation that HeiTech Padu, which provides maintenance systems to the incumbent Malaysian Immigration System, had not bid for the NIISe project, but is understood to have emerged as one of the three shortlisted companies.

In mid-December last year, the home ministry called for proposals to design, implement and maintain the NIISe, and the bids were closed on Jan 10 this year.

DNeX, a technology, energy and IT company, has been operating the National Single Window, which involves providing e-services for trade facilitation, electronic customs-related transactions and duty payments and electronic document transfers between members of its trading community. Among others, DNeX also provides one-stop global digital trade and logistics cloud services with automation, visibility, connectivity and intelligence, operating a digital supply chain ecosystem by connecting and integrating multiple stakeholders in the trading, logistics and supply chain community.

Other key revenue generators for DNeX include its upstream oil and gas outfit Ping Petroleum Ltd and semiconductor wafer foundry company SilTerra Malaysia Sdn Bhd.

For its 15 months (the company changed its financial year-end from June 30 to Dec 31) ended September 2023, DNeX suffered a net loss of RM105.35 million from RM1.63 billion in revenue.

As at end-September last year, DNeX had cash and cash equivalents of RM419.73 million, and on the other side of the balance sheet, it had long and short-term borrowings of RM246.72 million and RM47.63 million. Both DNeX’s long- and short-term borrowings are secured.

Its retained earnings as at end-September 2023 stood at RM659.12 million.

At its close of 35.5 sen last Thursday, DNeX had a market capitalisation of RM1.12 billion.

Information technology solutions provider Theta Edge’s largest shareholder is pilgrim fund Lembaga Tabung Haji, which has 27.28% equity interest in the company.

In September last year, Theta Edge announced a collaboration with Estonian technology firm Cybernetica on joint development, implementation, marketing and promotion of digital identity products exclusively in Malaysia, and digital identity, cybersecurity, privacy enhancement and interoperability within Malaysia and other Asean countries on a project basis.

It is not clear if this collaboration has anything to do with Theta Edge’s NIISe aspirations.

Theta Edge, for its nine months ended September 2023, suffered a net loss of RM1.75 million from RM82.58 million in revenue. For the corresponding period a year ago, the company chalked up after-tax profits of RM7.58 million from RM68.5 million in sales.

As at end-September 2023, Theta Edge had cash and cash equivalents of RM51.45 million and no borrowings as well as accumulated losses of RM43.78 million.

Its close of 73 sen per share last Thursday translates into a market value of RM86.1 million.

HeiTech Padu’s stock hit a 52-week high of RM1.23 on Feb 8, having gained almost 50% from mid-January this year.

For its nine months ended September 2023, it suffered a net loss of RM9.19 million on the back of RM190.94 million in sales. For the corresponding period a year ago, the company suffered a net loss of RM3.18 million from RM219.59 million in revenue.

As at end-September last year, HeiTech Padu had cash and bank balances of RM47.83 million and its short-term debt commitments were RM122.89 million while its long-term borrowings were pegged at RM8.16 million. The company had accumulated losses of RM38.28 million as at end-September.

HeiTech Padu ended last Thursday at RM1.21, giving the company a market valuation of RM122.5 million. 


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