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From the Q1 QR, revenue was flat but earnings fell by half - mainly due to SWM. With the upcoming election, it's unlikely that there will be rate revisions because it will make the government unpopular so SWM will likely continue to bleed. Sg Rasau Package 2 is only 39% completed and Package 3 19%, so there might be further delays. Grand Saga highway also facing competition from the new EKVE. Dividend has been cut from 0.0075 in Q4 to 0.0025 - if maintained, DY is barely 2.5%.
The current price surge, towards the end of yesterday's briefing and this morning, is highly suspicious. The 30th biggest shareholder only has 1.4M shares but the volume for this morning alone is already more than 20M shares!
"Hope" is not a strategy. At the current share price, P/E is almost 30x and DY is 0%. With cash balance falling several quarters in a row due to their AI CAPEX, and management couldn't even give a timeline for a turnaround yesterday and just said hopefully they won't take as long as Adobe's transformation, this stock is dead money! You can see many of the Top 30 shareholders in the AR, especially institutional investors, already sold.
It's already up 50% from the recent low of 0.17. From an earnings perspective, it's no longer cheap at 0.25 and they didn't announce any dividends for FY25. E-invoicing has also been delayed again to 2028 and they're in the middle of an AI CAPEX. The good news is their SaaS client migration, i.e. subscription instead of one-time fee, has been quite successful. Can join their upcoming briefing to learn more.
If DXN can maintain 0.007 quarterly dividend, that works out to 0.028 per year and 6.2% DY at the current price of 0.45. But the quarterly dividend has been cut from 0.01 to 0.007 in one year, i.e. 30% drop.
The next QR should be better than Q3 FY25 because of the full 3-mth contributions from TBS Singapore and B&L Jakarta. TBS Vietnam also turned profitable in Q4 FY25. If earnings is >RM 3M, the worse is over and the share price will pop.
Maybe because the drop in price in Q1 25 was only about 10% vs 25% for Q1 26? I'm just guessing - we will know if it drops back to 0.375 when market opens.
