RAM Ratings assigns ratings to DNeX's maiden sukuk programme

RAM Ratings has assigned ratings of A1/Stable and A3/Stable to Dagang NeXchange Berhad's (DNeX or the Group) proposed RM3.0 bil Senior Islamic Medium-Term Notes and Subordinated Perpetual Islamic Notes Programme. 

The ratings reflect the Group's diversified business profile. Its three core businesses (semiconductor, energy and IT) contributed a respective 61%, 23% and 16% to Group revenue for FY Dec 2025. In our view, DNeX's market position in the semiconductor and IT businesses is protected by barriers to entry, including high capital intensity and long operating track record, technical expertise, and the strategic importance of certain assets to the nation. The Group has strengthened its operational capabilities through strategic partnerships with global players, such as Google (Google Distributed Cloud services), Interuniversity Microelectronics Centre (semiconductor process technology), and fellow upstream player Hibiscus Petroleum (management of United Kingdom oilfield assets).

DNeX's financial profile is currently underpinned by its conservative leverage and healthy liquidity. As at end-December 2025, outstanding borrowings stood at RM132.8 mil, with gearing ratio of 0.08 times. The Group also retained its net-cash position with available liquidity of RM299.6 mil. Going forward, projected gearing is expected to rise to moderate 0.7-0.8 times by end-2027 as the Group draws down on the rated sukuk to fund its three-year capex commitments of RM1.6 bil. 

DNeX's operational cash flow generation, while positive, has been volatile due to the cyclicality of its business as well as working capital requirements for ongoing projects. The quantum of cash flows has also been limited by the scale of its businesses at this juncture. Notwithstanding this, coverage ratios remain strong, owing mainly to the Group's low debt levels. For FY Dec 2025, DNeX's respective funds from operation debt coverage (FFOD