KUALA LUMPUR, July 24 — Dagang NeXchange Bhd, Malaysia’s best performing midcap stock, is in merger talks for its technology and energy businesses, betting acquisitions will boost its profit growth target to double digits this year.

For its IT unit, Dagang NeXchange is in advanced talks to acquire a company, while negotiations about the energy unit are still preliminary, said Zainal Abidin Jalil, group managing director.

More than 80 per cent of the company’s revenue was from the IT side last year and the rest was from energy.

"We are a growth company and part of the growth will be via M&A,” said Zainal, 58, in an interview at the company’s headquarters in Kuala Lumpur. "The biggest potential in terms of growth is going to be the energy side.” He declined to give further details.

Dagang NeXchange has risen 195 per cent in the past 12 months, the best performer on the FTSE Bursa Malaysia EMAS Index among stocks worth more than RM1 billion in market value.

The gain has been supported by earnings from the company’s foreign vehicle entry payment project and a logistics system for monitoring trade in and out of the country.

"So far the management has been able to deliver despite the weak environment,” said  Mohd Shanaz Noor Azam, an analyst at CIMB Investment Bank Bhd., who rates the stock "add” which is equivalent to a buy recommendation.

The company’s first-quarter net income announced in May rose 180 per cent to RM15.1 million from a year earlier. It also plans to pay a regular annual dividend, Zainal said. Dagang NeXchange has an indirect stake in the Anasuria oilfield in the North Sea basin, which has contributed to earnings since at least 2016. — Bloomberg