• Overview. 3QFY19 core earnings were flat yoy despite 10% increase in revenue as opex rose. On qoq basis, revenue was down due to lower contribution from commercial services but negated by tax credit of RM1.3m.
• Key highlights. On yoy basis, revenue continue to grow despite concerns over the end of contract for foreign worker rehiring program in Jun 2018 impacting revenues in FY19.
• Against estimates: Inline. 9MFY19 core earnings were inline with our expectations at 74% but trailed consensus at 67%.
• Outlook. We remain positive over MyEG's prospects over the longer term given its established IT infrastructure and strong track record in e-gov services. Furthermore, we also look forward to its regional growth gaining traction over the medium term.
• Our call. Maintain BUY with a DCF-derived TP of RM1.70 (WACC: 8.6%, g: 1%) which implies an FY19/20F PE of 25x/21x. Its strong track record in e-gov services should provide MyEG an edge over prospective competitors looking to enter the space.

Source: BIMB Securities Research - 6 Sept 2019