MYEG (0138) : MY E.G. Services - Ex-date for 1-for-1 bonus issue today
Target RM3.90 (Stock Rating: ADD)
MyEG’s share price goes ex-bonus today (1-for-1 issue). Our ex-bonus target price is RM3.90. A larger issued share base should help to improve its trading liquidity and also make it more attractive to retail investors. We our EPS forecasts and target price, still based on 21x CY16 P/E (in line with its peers). The successful launch of the custom service tax monitoring (CSTM) project and new developments in its foreign worker permit renewal services (FWPR) are potential re-rating catalysts for the stock. We retain our Add call on the stock.
What Happened
Today is the ex-date for MyEG’s 1-for-1 bonus issue. With the completion of the bonus issue, its issued share base rises from 600m to 1.2bn shares. Accordingly, our target price has been adjusted to RM3.90.
What We Think
While the company’s fundamentals are unchanged, a larger issued share base should help to improve the stock’s trading liquidity. In addition, its lower ex-bonus share price makes the stock more attractive to retail investors.
What You Should Do
Remain invested in the stock. Earnings growth is strong at 71% 3-year EPS CAGR, driven mainly by two projects, custom service tax monitoring (expected to start nationwide coverage in late-Feb 2015) and foreign worker permit renewal services (FWPR). The government also recently appointed MyEG to work with the immigration department to compile and maintain a comprehensive database for foreign workers (legal and illegal) working in Malaysia.
Source: CIMB Daybreak - 09 January 2015
Target RM3.90 (Stock Rating: ADD)
MyEG’s share price goes ex-bonus today (1-for-1 issue). Our ex-bonus target price is RM3.90. A larger issued share base should help to improve its trading liquidity and also make it more attractive to retail investors. We our EPS forecasts and target price, still based on 21x CY16 P/E (in line with its peers). The successful launch of the custom service tax monitoring (CSTM) project and new developments in its foreign worker permit renewal services (FWPR) are potential re-rating catalysts for the stock. We retain our Add call on the stock.
What Happened
Today is the ex-date for MyEG’s 1-for-1 bonus issue. With the completion of the bonus issue, its issued share base rises from 600m to 1.2bn shares. Accordingly, our target price has been adjusted to RM3.90.
What We Think
While the company’s fundamentals are unchanged, a larger issued share base should help to improve the stock’s trading liquidity. In addition, its lower ex-bonus share price makes the stock more attractive to retail investors.
What You Should Do
Remain invested in the stock. Earnings growth is strong at 71% 3-year EPS CAGR, driven mainly by two projects, custom service tax monitoring (expected to start nationwide coverage in late-Feb 2015) and foreign worker permit renewal services (FWPR). The government also recently appointed MyEG to work with the immigration department to compile and maintain a comprehensive database for foreign workers (legal and illegal) working in Malaysia.
Source: CIMB Daybreak - 09 January 2015
