MYEG Services Bhd was once a darling stock due to its dominant position in the e-government services industry. But as time went on, coupled with political changes, the counter’s attractiveness has been called to question.
This is not only because there are newer players in the industry, such as MyPay, but also because some of its latest initiatives such as the Covid-19 rapid test kits (RTKs) have run into a snag. According to the group, approval for its RTKs is on hold and this came after a policy decision by the Ministry of Health to bar the use of such kits in clinics.
Rakuten Trade vice president Vincent Lau said MyEG had been proactive in expanding their services. “So that is a plus,” he told FocusM. “As for their government services, they have the infrastructure in place and people still use them. So they are still a company worth looking at. They may not be high flying at the moment, but they are not running into the sunset either.”
Another analyst tracking the stock also said it would be too early to write off MyEG. “They have been the dominant player for years now. That itself accorded them the privilege to have excess capacity and also a technological advantage against rivals. So, the group might have to bite the bullet for now but they can weather the crisis for now,” the analyst said.
MyEG recently posted a net profit of RM68.6 mil on the back of revenue of RM119.69 mil for the quarter ended Dec 31. No comparative financial information was available as the group changed its financial year end to Dec 31 from Sept 30.
More recently, on May 13, the group denied it had collaborated with the Social Security Organisation (Socso) in relation to the launch of its one-stop portal for employers to manage Covid-19 screenings for their staff.
But MyEG clarified that the group received a letter dated May 8 from the Department of Labour Peninsular Malaysia which threw support for the group’s initiative, as well as its digital certificate related to the Prihatin Screening Programme (PSP).
PSP is a Covid-19 screening programme for employees of companies that are allowed to operate during the Movement Control Order (MCO), including foreign workers. Screening is free for Socso contributors, with the organisation bearing the cost.
MyEG’s share price opened 0.78% higher at RM1.29 after the midday break. – May 15, 2020
