KUALA LUMPUR: Shares in Dagang Nexchange Bhd (DNeX) jumped over 16% in early trade Tuesday after announcing a multi-year deal with Google Cloud to provide sovereign cloud services in the country.
The counter surged 16.42%, rising 5.5 sen to 39 sen at 9:44 am, making it the most active counter on Bursa Malaysia with 73 million shares traded. Despite this gain, it has experienced a 2.5% decline year-to-date.
Under the agreement, DNeX will be authorised by Google Cloud to operate Google Distributed Cloud (GDC) as a managed GDC provider or MGP, with a focus on air-gapped configurations for organisations in Malaysia.
Dnex said it will offer deployment options for GDC air-gapped on-premises or within partner data centres, with flexible hardware options – including general-purpose central processing units and graphics processing units – to address organisations’ specific workload requirements.
Hong Leong Investment Bank (HLIB) Research stated that the potential revenue contribution from this venture is still uncertain at this time.
However, the research house anticipated that DNeX would receive a percentage of the revenue generated from the sale of these services.
“We understand that it will only start contributing to the group from 2H25 onwards,” it said
HLIB Research noted that by expanding its offerings to include hosting services, this business venture complements DNeX’s IT division.
In addition to tapping into the increasing demand for cloud services in Malaysia, DNeX can also provide services such as data migration and system integration through its IAC unit.
“We maintain our SOP-derived TP of RM0.37– pegged to the valuation base year of FY25f. We remain cautious on the stock as SilTerra has not yet displayed an evident recovery thus far, coupled with subdued showing from other business segments.
“We maintain ‘hold’ rating pending signs of recovery in SilTerra’s operating performance,” HLIB said.