KUALA LUMPUR: My EG Services Bhd's share price jumped as much as 78 sen, or 9.09 per cent higher, in early trade on news of a contract extension for its immigration services.

On July 7, MyEG announced it had received formal notification from the Ministry of Home Affairs stating that the Ministry of Finance had affirmed the extension of its immigration-related concession.

The news led Maybank Investment Bank Bhd (Maybank IB) to revise its earnings forecasts for My EG and increase its target price for its share price to RM1.14.

"Notwithstanding the threat posed by the future implementation of NIISe (National Integrated Immigration System) (circa second half of 2025), the extension of MYEG's immigration concession effectively renders near-term policy risks/uncertainty benign," it said in its report post announcement of the contract extension by My EG last Friday.

In February 2023, the Immigration Director General issued a statement implying that My EG's immigration concession would not be renewed owing to the development of NIISe.

The research firm has raised its financial year 2023- 2025 earnings estimates by 1-5 per cent.

Maybank IB said although not explicitly stated, it gathers from My EG management that the extension is for a period of three years through to July 2026, with an expansion of its previous concession scope to include foreign worker identity verification and the delivery of i-Kads at a presumptive charge of RMR22 per worker.

The expanded scope of service will apply to both walkin renewals at the Immigration Dept (c.100,000-200,000 per annum) as well as new foreign worker permit applications (c.500,000-600,000 p.a.).

"Moving forward, the fees from this new service will serve as ancillary income to complement the existing concession business of foreign worker permit (PLKS) renewals," the research firm said.

As at 10.02am the company's shares were trading at 75.5 sen a share.

https://www.nst.com.my/business/2023/07/929293/my-egs-share-price-jumps-much-9-pct-contract-extension