• Maintain BUY with a revised TP of RM1.44. MyEG Services Berhad (MyEG) reported 9M24 core PATAMI of RM492.1mn (+45.7% YoY), in line with both our and consensus estimates, accounting for 78.7% and 79.7% respectively. The strong growth was mainly driven by: 1) higher contributions from services rendered on its Zetrix blockchain platform, such as ZTrade, ZCert and Digital ID registration and transactions, 2) revenue from the sale of Zetrix tokens, and 3) a fair value gain from its investment in HeiTech Padu Berhad. No dividend was declared for the quarter. We maintain our BUY recommendation while raising our target price to RM1.44 (from RM1.34), based on a 5-year average forward PER of 16x applied to 2025F EPS of 9.0sen, as we roll over our valuation to 2025F.

• Key Highlights. In 3Q24, revenue and core PATAMI grew 27.8% YoY and 39.2% YoY to RM248.1mn and RM167.3mn, respectively. This was driven by robust demand for Zetrix tokens following expanded services on the Zetrix blockchain platform. On a QoQ basis, revenue rose by 2.4%, while EBIT increased by 17.1%, on the back of RM24mn fair value gain in MyEG’s investment in Heitech Padu Berhad. Excluding this gain, core PATAMI increased by a modest 0.9%. Notably, MyEG’s cumulative 9M24 revenue from customers outside Malaysia has surged over 280% YoY to RM245mn from RM64mn in 9M2023, now constituting around 34% of its total revenue compared to 12% in 2023. This highlights a significant reduction in reliance on domestic business – a positive development, in our view.

• Earnings Revision. We make no changes to our earnings forecast.

• Outlook. Moving forward, we believe that MyEG will leverage its blockchain technology, to drive the company’s organic growth by offering more innovative services, not only to its customers in Malaysia, but also globally. We foresee the integration of Zetrix with China’s national blockchain platform, “Xing Huo”, will further positions MyEG in facilitating seamless cross-border trades, marking the company’s strategic entry into the global market.

Source: BIMB Securities Research - 21 Nov 2024