A novel dedicated outdoor air system consisting of a multi-stage direct expansion coil and a zero-energy heat pipe to generate extra-low temperature outdoor air to avoid moisture-related problems was proposed in this study. The proposed system's performance in achieving the desirable air conditions and better energy efficiency objectives is compared with a conventional direct expansion system for air-conditioning of a typical office building in Hong Kong based on simulation investigations. The simulations were carried out using equipment performance data of a pilot study, and realistic building and system characteristics. It was found that the proposed system, as compared to the conventional system, could reduce the annual indoor discomfort hours by 69.4%. An energy and exergy analysis was also conducted. It was revealed that the proposed system could reduce the annual air-conditioning energy use by 15.6% and the system exergy loss rate by 13.6%. The associated overall exergy efficiency was also found 18.6% higher. The findings of this study confirm that the proposed system is better than the conventional system in terms of both energy and exergy efficiency and the desirable air conditions. (C) 2016 Elsevier Ltd. All rights reserved.