Bursa Malaysia Stock Watch
MyEG...Right Place, Right Time
kltrader
Publish date: Sun, 07 Mar 2010, 07:57 PM
kltrader
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MyEG, being a e-services concessionaire (15 years) for the Malaysian Government, play key role in enabling the People to interact electronically with numerous agencies within the Federal, State and the Local Government in services ranging from information searches to license applications.
The risk to the pick is Government's earlier intention (end 2008) to end its monopoly by allowing more players to increase efficiency and wider network coverage. However, MyEG is expected to get a fair share of market due to good headstart as a pioneer with established platform and foundation.
Kenanga has a fair value of RM0.55 in its recent coverage.
My liking of this stock instigated from its services that "buy people more time" with minimal fees. In an "Always Rush Hour" business environment, where we struggle to fight for more free time, MyEG services come to the rescue. With us turning more tech-savvy, the growth opportunity for these services is abundant as evident in the strong growth in its online transaction.
Apart from its main earning drivers from Road Transport Dept (JPJ) and insurance segment, MyEG is expected to launch more G2B & G2C (Government-to-Business & Citizen) services as follows:-
1. Online transfer of motor vehicle ownership.
2. Police (PDRM) services e.g. online police reports.
3. JPJ e-application of new motor vehicle registrations.
4. e-Court.
5. Online renewal of maid's permits.
6. Online services for Department of Statistics and Ministry of International Trade and Industry (MITI).
7. Online transactional services for Jabatan Pendaftaran Negara (JPN) e.g. application for replacement of MyKad, load driving license and passport data onto Mykad.
8. Online services-tax monitoring system (in line with the upcoming introduction of GST (Goods and Services Tax) involving an investment of RM40 million.
Back to facts and figures, the exciting topline and bottomline number below clearly reflects its high growth potential.
Source: Annual Report 2009, Bursa Malaysia
Its net cash position (RM14.5 million cash vs. total borrowings of RM8.3 million) plus a recession-proof business nature will cushion its downside. This is the rare case of best of both worlds.
Its net cash position (RM14.5 million cash vs. total borrowings of RM8.3 million) plus a recession-proof business nature will cushion its downside. This is the rare case of best of both worlds.
On the continuous disposal of MyEG by Lembaga Tabung Haji (LTH), I'm not particularly concerned due to possible portfolio rebalancing. The same act applied to Unisem, Evergreen, APM etc.
The risk to the pick is Government's earlier intention (end 2008) to end its monopoly by allowing more players to increase efficiency and wider network coverage. However, MyEG is expected to get a fair share of market due to good headstart as a pioneer with established platform and foundation.
Kenanga has a fair value of RM0.55 in its recent coverage.
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