MyEG / Wong Thean Soon

[winston]

not vested

My EG Services (MYEG MK)
Misleading Misgivings

We foresee a good buying opportunity on dips following the statement by the present
DG of the immigration department that all immigration-related affairs would be reverted
to the department in 2025.

We believe that MYEG would still have an important role in immigration-related services.

Meanwhile, there are plenty of catalysts like the recovery of the foreign worker segment, Zetrix blockchain and listings of mature start-up investments.

MYEG is poised to deliver 16% earnings growth in 2023F, fueled by strong demand of
the Malaysian e-government businesses:
a) accelerated momentum in foreign worker matching and visa renewal services, and
b) robust growth from motorcycle road tax renewal and e-testing (now expected to roll out in March).

Our 2023F earnings forecasts also factor in relatively modest contributions from Zetrix-related services. Meanwhile, its Philippines egovernment division staged an impressive revenue growth in 2022.

Maintain BUY. Target price: RM1.30.

Source: UOBKH

https://research.uobkayhian.com/content ... f92f149540

[winston]

vested

MyEG gaps down at opening on news it won't be involved in immigration matters by 2025; Iris sees jump in interest

The loss of services, if reverted to the Immigration Department as planned, may impair MyEG’s long-term revenue (2025 and beyond) by circa 20%."

On the other hand, MyEG’s steady 2022-24E earnings outlook, stable revenue from the road-transport businesses, exciting new business opportunities (the JPJ e-testing system, blockchain initiatives), and potential business opportunities from NIISe related works should help support its share price.

The implementation of the national integrated immigration system or NIISe, which will converge all immigration transactions, including passport renewals, visa applications, applications and renewals of permits for foreign workers.

It estimated that immigration-related services contribute to 40-50% of MyEG's revenue.

"These immigration-related services include the renewal of foreign workers’ work permits (10-15% of total revenue) and other ancillary and commercial services, such as renewal of foreign workers’ insurance and foreign worker job matching (30-35%).

The loss of services, if reverted to the Immigration Department as planned, may impair MyEG’s long-term revenue (2025 and beyond) by about 20%.

Source: theedgemarkets.com

[winston]

not vested

MY E.G. Services
Worst-case scenario already priced in

MyEG has clarified that it is not in discussions with the government over the potential convergence of its immigration concession under NIISe.

We think the market overreacted to the NIISe news (share price down 27%); we also think MyEG will receive another concession extension in 2H23F.

MyEG offers an at least 17% upside, even in a worst-case scenario without earnings accretive potential from blockchain development. Maintain Add. TP RM 1.00

Worst-case scenario still offers 17% upside from current levels

We estimate that the immigration services concession contributes about RM70m in annual
revenue to MyEG, based on the last extension worth RM208m for three years signed in
2020.

In addition, MyEG also provides other services related to foreign workers that are
not covered under the concession, such as foreign worker insurance, job matching and
placement, and dormitories.

We estimate these ancillary services contribute another RM70m in annual revenue to the group. Hence, we estimate the immigration services transactions will account for 18-21% of MyEG’s FY23-24F revenue and PAT.

Stripping out the immigration services contributions, our TP would fall to RM0.82, which still offers a 17% upside from current levels.

We have also not factored in new earnings potential from its Zetrix blockchain despite the group expecting to see material earnings contributions from its Web3 development in FY23F.

We retain our Add rating with a lower RM1.00 TP, based on a lower 20x P/E (vs. 22x previously), as we update our target multiple to reflect its latest 5-year mean P/E (2018-22).

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 02406F3232

[winston]

not vested

My EG Services (MYEG MK)
Uncertainty casted over its immigration biz; TP cut
Cut TP, maintain BUY

We had a conversation with the management following the news implying MyEG will no longer be involved in the nation’s immigration system by 2025.

The related concession business comprises c.10% of MyEG’s FY23E revenue, and its ancillary business could also be impacted.

We make no change to our earnings forecasts, though our TP is cut to MYR1.01 (-26%) as we change our valuation methodology to SOTP (PER previously).

Maintain BUY; its new businesses could grow to fill the void by then.

Source: Maybank

[winston]

MyEG Philippines posts solid growth in 2022

Annual transactions handled surging over three-fold to a new high of about PHP5 billion (US$91mil) in 2022.

Source: The Star

https://www.thestar.com.my/business/bus ... th-in-2022

[winston]

not vested

MYEG Flash Updates by UOBKH (MYEG MK/BUY)

At a press conference just now, transport minister Loke Siew Fook says that vehicles owned by Malaysians no longer have to display their motor vehicle licences (road tax) effective today, to be done in stages.

This was part of the transport ministry’s efforts to digitise the road transport department’s (JPJ) services, particularly for motor vehicle licences and driving licences.

Nevertheless, this does not affect renewal of road tax on MYEG’s portal, as renewal can still done through all existing channels such as MYEG, JPJ counter and post office. Just that users can now can opt not to take delivery of the physical sticker.

Meanwhile, while this will affect MYEG’s delivery service of physical road tax, we understand that the profit contribution from such service is not meaningful to MYEG due to high delivery costs(MYEG provide delivery service for user convenience and one-stop). Reduced delivery also means cost savings for MYEG from having to deliver so net net no real impact one way or another.

To add on, we’ve downloaded the JPJ app recommended by the transport minister and the app isn’t used to renew road tax but only to display road tax and drivers license from database.

MYEG is also submitting a proposal for jpj to switch to web3 solution so they can do this whole digitalisation process in a more holistic manner. But for now, based on the current setup, no change to the role of myeg or any of the other channels.

As such, we deem that the digitalisation of JPJ road tax renewal is neutral to MYEG

Source: UOBKH

[winston]

vested

MyEG’s outlook dependent on immigration segment

MyEG Services Bhd (MyEG) will face a revenue shortfall of 6% to 7% by financial year 2025 (FY25) and 8% to 10% by FY26 if it is no longer involved in the nation’s immigration system by 2025.

Its revenues could fall by the second half of 2025 following the completion and migration of the immigration system to National Integrated Immigration System (NIISe).

The immigration segment contributes about 35% to 40% of its overall annual revenue, although only 10% (RM70mil to RM80mil) is related to the government concession i.e. the foreign worker permit renewal, said Maybank IB Research.

It said the balance 25% to 30% (about RM200mil) is the commercial aspect of the business, namely for commissions from cross-selling of insurance products and foreign worker recruitment for employers.

Source: The Star

https://www.thestar.com.my/business/bus ... on-segment

[winston]

My EG Services (MYEG MK)
Overly Bearish Misgivings On Its Relevance In E-Government Services

We expect coming events to dissipate the excessively bearish sentiment on the prospects of MYEG's e-government's concessions, in reaction to last week’s unrelated media statements by the Immigration DG and the transport minister.

Over time, investors will also re-focus on various re-rating catalysts for MYEG which now trades
around its historical trough valuation.

However, we cut our earnings and target price to acknowledge the potential market share loss. Maintain BUY. TP RM 0.98

Source: UOBKH

https://research.uobkayhian.com/content ... 207cb33113

[winston]

not vested

Frankly Speaking: MyEG on familiar ground

According to a research house, only 10% of its revenue is related directly to the government concessions, with the rest coming from ancillary services, such as insurance and processing of recruitment permits for foreign workers.

MyEG has a pool of companies and customers that has been using its services for foreign-worker matters for several years now. It is highly unlikely that these customers will move to other providers for its ancillary services.

Source: The Edge Malaysia

https://www.theedgemarkets.com/node/654940

[winston]

not vested

Why was this firm given the project?

By MAZWIN NIK ANIS

The committee which endorsed the company for the project did not fully determine if it is capable of undertaking the job.

The company could not pay RM30mil to another firm supplying licence for IT.

Since the project was awarded in 2021, not even Phase One, which is the analysis report on requirement and design, had been completed.

The government had released RM60mil to the company, or about 5% of the RM1.13bil project cost showed that “not much work has been done”.

Source: The Star

https://www.thestar.com.my/news/nation/ ... he-project