MYEG (0138)

MY E.G. Services Bhd is primarily engaged in the development and implementation of the Electronic Government Services project, the provision of other related services, and investment holding in Malaysia. Electronic Government Services include the testing, issuance, and renewal of drivers’ licenses, renewal of vehicle road tax, vehicle ownership transfer, the renewal of foreign workers permits, bankruptcy status searches, and payment systems.

Fundamental Analysis

Figure 1: Quarter profit margin of MYEG

Figure 2: Quarter ROE of MYEG         

Figure 3: Quarter EPS of MYEG

The figure above shows that there is a significant improvement in MYEG’s financial position, as the figure turns from negative value to positive value for most of the fundamental indicators such as profit margin, Return of Equity (ROE) and Earning per Share (EPS).

This positive last quarter’s financial result is contributed by its solid profit margin as a result of:

1. concession related services such as Immigration and JPJ related and ancillary series;
2. commercial services such as motor vehicle trading related services, financing services, sale of tax monitoring system as well as contribution from Cardbiz Group.

It is a fundamentally good company (fundamental rating > 2.5) according to the financial reports up to March 2018, as it passes 6 out of 8 of MQ Fundamental tests. However, its fundamental rating is deteriorated by its financial result with losses incurred in 3Q18.

1 Year Technical Chart

A sharp plunge in share price is observed in April 2018 as a result of poor post GE14 sentiment towards MYEG. Thereafter, its share price has been experiencing sideway price movement, as it is a government linked company which its performance is highly dependent to the government’s policy.

Technical Analysis

MYEG’s MQ technical rating is 5.0/5.0 at the moment showing that its share price is currently experiencing a highly bullish trend. According to the breakdown of the technical analysis, most of the technical tests detected bullish signal from its current share price movement.

EMA 5 Crossover Daily Chart

ADX Crossover Hourly Chart

Majority of MQ Trader trading strategies captured buy signals with strong buy momentum on 6 March 2019. This reflects the positive impact brought by its healthy profit margin which is above 50% achieved in its last quarter.

MQ Live Backtesting

To confirm the signal quality, MQ Backtesting is used to determine the success rate of the signal. Based on the MQ Backtesting result, all the latest buy signals released in March 2019 are validated to have below average rating. In short, the probability of sharp increase of share price to happen within 10 trading days is not high.

Conclusion

In our opinion, we will utilize “fast in fast out’ strategy to grab opportunities by using MQ Trader Trading Strategies (i.e. EMA 5 Crossover) within short period of time. News or announcement should be monitored from time to time, as their main revenue stream which is contributed by government might be affected after GE14. At the same time, we have to be aware of the existence of sell signals detected by MQ Trader Trading Strategies when any unfavorable event happens to MYEG, so that we can exit our position to protect our capital during that time.

MQ Trader Analysis Tool

To view MYEG’s fundamental analysis on MQ Trader: https://klse.i3investor.com/mqtrader/sf/analysis/fa/0138

To view MYEG’s technical analysis on MQ Trader: https://klse.i3investor.com/mqtrader/sf/analysis/stkta/0138

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Disclaimer

This article does not represent a BUY or SELL recommendation on the stock covered. Traders and Investors are encouraged to do their own analysis on stocks instead of blindly following any Trading calls raised by various parties in the Internet. We may or may not hold position in the stock covered, or initiate new position in the stock within the next 7 days.

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