NEXG BERHAD’s Latest Quarterly Report: Navigating Growth Amidst Strategic Shifts and Market Dynamics
Greetings, fellow investors and market enthusiasts! Today, we’re diving deep into the latest financial report from NEXG BERHAD (formerly Datasonic Group Berhad), a key player in Malaysia’s secure identity and digital solutions space. This report, covering the fourth quarter and full financial year ended 31 March 2025, paints a picture of a company actively transforming and expanding its horizons, even as it navigates evolving market demands.
While the latest quarter saw a slight dip in revenue, NEXG has delivered a robust full-year profit performance, driven by strategic initiatives and efficient cost management. The company’s proactive stance on acquisitions and corporate exercises signals a clear intent for long-term growth and diversification. Let’s break down the numbers and key developments that are shaping NEXG’s journey.
Financial Performance Highlights: A Mixed Quarter, Strong Full Year
NEXG’s financial performance in the fourth quarter (Q4 FY2025) presented a nuanced picture, with a slight revenue contraction but impressive profit growth. However, the full financial year (FY2025) demonstrates solid overall expansion.
Quarterly Performance (Q4 FY2025 vs. Q4 FY2024)
For the individual quarter ended 31 March 2025, NEXG reported a decrease in revenue compared to the same period last year. This was mainly attributed to a lesser demand from customers for smart cards, passports, and personalisation services.
Q4 FY2025 Revenue: RM103,775k
Q4 FY2024 Revenue: RM115,744k
Despite the revenue dip, the company significantly improved its profitability, primarily due to lower operating costs and a substantial increase in “Other Income,” which includes a fair value gain on other investments.
Q4 FY2025 Profit Before Tax: RM53,652k
Q4 FY2024 Profit Before Tax: RM48,583k
Q4 FY2025 Profit After Tax Attributable to Owners: RM43,808k
Q4 FY2024 Profit After Tax Attributable to Owners: RM38,598k
Q4 FY2025 Basic Earnings Per Share: 1.57 sen
Q4 FY2024 Basic Earnings Per Share: 1.37 sen
However, it’s important to note the impact of recent corporate exercises on diluted earnings per share:
Q4 FY2025 Diluted Earnings Per Share: 1.05 sen
Q4 FY2024 Diluted Earnings Per Share: 1.37 sen
The decrease in diluted EPS is mainly due to the dilutive effect of the bonus warrants issued during the financial year.
Full-Year Performance (FY2025 vs. FY2024)
For the full financial year ended 31 March 2025, NEXG recorded a commendable increase in both revenue and profit, demonstrating strong underlying business momentum. The higher demand from customers for smart cards, passports, and personalisation services contributed to this positive outcome.
FY2025 Revenue: RM373,454k
FY2024 Revenue: RM368,309k
FY2025 Profit Before Tax: RM151,775k
FY2024 Profit Before Tax: RM122,476k
FY2025 Profit After Tax Attributable to Owners: RM115,549k
FY2024 Profit After Tax Attributable to Owners: RM92,256k
FY2025 Basic Earnings Per Share: 4.15 sen
FY2024 Basic Earnings Per Share: 3.28 sen
Similar to the quarterly figures, the diluted EPS for the full year was also impacted by the issuance of bonus warrants.
FY2025 Diluted Earnings Per Share: 2.77 sen
FY2024 Diluted Earnings Per Share: 3.28 sen
Comparison with Immediate Preceding Quarter (Q4 FY2025 vs. Q3 FY2025)
Looking at the quarter-on-quarter performance, NEXG saw an improvement from the immediate preceding quarter (Q3 FY2025), mainly driven by higher supplies of smart cards, passports, and personalisation services.
| Metric | Q4 FY2025 (RM’000) | Q3 FY2025 (RM’000) | Variance (%) |
|---|---|---|---|
| Revenue | 103,775 | 97,901 | +6% |
| Profit Before Tax | 53,652 | 36,385 | +47% |
| Profit After Tax Attributable to Owners | 43,808 | 26,941 | +63% |
Balance Sheet and Cash Flow
NEXG’s balance sheet reflects a growing asset base, largely due to strategic investments and acquisitions. Total assets increased by 18.5% to RM555.09 million as at 31 March 2025, up from RM468.28 million a year ago. This increase is mainly attributed to higher other investments, development expenditure, and goodwill.
The company also demonstrated strong operational cash generation, with net cash from operating activities significantly improving to RM96.56 million for the full year, compared to RM57.71 million in the preceding year. This robust cash flow provides a solid foundation for future growth and investment.
Dividends
Regarding shareholder returns, NEXG announced a first interim single tier tax-exempt dividend of 0.75 sen per share for the financial year ended 31 March 2025. No new dividend was declared for the latest quarter.
Strategic Growth and Business Momentum
NEXG has been highly active on the strategic front, securing significant contracts and undertaking key acquisitions that underscore its growth ambitions and commitment to expanding its digital solutions footprint.
Recent Contract Wins
The company has successfully secured several notable contracts, reinforcing its position as a trusted partner for government agencies:
- Kementerian Dalam Negeri (KDN): Extensions for supply of MyKad, MyTentera, MyPOCA raw cards and consumables (RM27.81 million), comprehensive maintenance services for card personalisation centres (RM11.57 million), Malaysian Passport Chips (RM59.77 million), Malaysian Passport Documents (RM29.81 million), and Polycarbonate Biodata Pages (RM52.70 million). Further extensions were granted for Passport Documents (RM57.15 million) and Polycarbonate Biodata Pages (RM93.30 million), and a contract for Facial Live Capture (FLC) System maintenance (RM6.37 million).
- Kementerian Ekonomi (KE): Rental of 818 self-service machines for Program Inisiatif Pendapatan Rakyat (IPR) Inisiatif Usahawan Makanan (INSAN) valued at RM21.16 million over 24 months.
- Road Transport Department of Malaysia (RTD): Supply and printing services of special category driving license cards for RM21.52 million over 36 months.
- Civil Aviation Authority of Malaysia (CAAM): Development of Unmanned Aircraft System Traffic Management System (UAS TM System) for RM9.97 million over 24 months.
Strategic Acquisitions
NEXG also completed two significant acquisitions during the period, signaling its intent to diversify and enhance its technological capabilities:
- Innov8tif Holdings Sdn. Bhd.: Acquired a 51% equity interest for RM40 million. Innov8tif is a digital identity solutions provider, aligning with NEXG’s focus on secure identity and digital transformation. This acquisition is expected to bolster NEXG’s offerings in the rapidly evolving digital identity space.
- MMAG Holdings Berhad: Acquired 7.58% equity interest for RM70 million. While a minority stake, this investment could open doors to new synergies or strategic collaborations in the future, given MMAG’s diverse business interests.
Summary and Outlook
NEXG BERHAD has concluded its financial year with a commendable performance, marked by strong full-year profit growth and strategic expansion. The company’s core business in secure identity solutions remains robust, evidenced by a series of significant contract wins with key government agencies. Furthermore, the strategic acquisitions of Innov8tif Holdings and a stake in MMAG Holdings highlight NEXG’s proactive approach to broadening its capabilities and market reach, particularly in the burgeoning digital identity sector.
Looking ahead, Malaysia’s economic outlook for 2025 remains positive, with forecasted GDP growth supported by domestic consumption and investment flows. National priorities around digitalisation and secure identity infrastructure are expected to continue driving demand for NEXG’s integrated, technology-driven solutions. The company’s ongoing focus on R&D and platform innovation positions it well to capitalize on these trends and contribute to Malaysia’s digital economy agenda.
However, investors should also be mindful of certain considerations:
- Dilution from Corporate Exercises: The issuance of bonus warrants, along with the proposed private placement, will increase the total number of shares in circulation, which has already impacted the diluted earnings per share.
- Integration Risk: While the acquisitions are strategic, successful integration of new businesses like Innov8tif is crucial to realize the anticipated synergies and returns.
- Market Demand Fluctuations: The slight dip in Q4 revenue due to “lesser demand” for certain products indicates that market dynamics can still influence short-term performance.
Overall, NEXG appears to be in a strong position, leveraging its core strengths while strategically investing in new growth areas. The company’s ability to secure large government contracts and its commitment to digital transformation suggest a promising trajectory.
What are your thoughts on NEXG BERHAD’s latest performance and its strategic direction? Do you believe the recent acquisitions and corporate exercises will significantly enhance its long-term value? Share your insights and perspectives in the comments below!
