MYEG (0138) - MYEG – CEO Lunch with TS Wong (16 May 2018)


After The Star clarified that the event with the CEO happened, we decided to re-post this transcript.
We explained why we took down the info earlier here.

We (MYEG) hosted a lunch for investors today in our office; 28 clients attended.
Despite losing 60% in 2days, he was in good spirits, and the session was light-hearted.
It was a Q&A session so the topics jumped all over – apologies.
Q: In your view, which contract is most at risk?
A: All the contracts we have undertaken have agreements behind them. Of course the highest risk is the GST one. We have not recognized any revenue. Everything else is business as usual. We have not had a chance to speak to any Govt official.
Q: So far, how much have you invested into the GST program?
A: We have invested RM 150 million. We have more than 10 thousand dongles, probably close to 20 thousand.
Q: Any chance of being compensated?
A: We have grounds to seek compensation.
Q: When do you expect to negotiate the expiry of the contracts?
A: Usually a year before expiry, so next year. (expiry 2020)
Q: Can any other player replicate what you do?
A: Of course it can be replicated but we’d like to think that even if there are new players, I believe we can compete efficiently and effectively plus we already have the first mover advantage. DoI think we can work with the new Govt? I am asking myself a question. Yes, I think we can. I believe we can establish a good relationship. MYEG is one of the Govt’s flagship MSC projects and I think we are probably the only one still left. Remember that MSC is Tun Mahathir’s initiative. I cannot proclaim that this is rocket science but it takes time, operational time to put things in place.
Q: Any tax incentive? And the expiry? Will it be extended?
A: 2021, I believe it is still too early to comment whether it can be extended but we will look into it when the time comes.
Q: What is your next step?
A: We are paid a small fee like RM 30 (for a transaction) from the Govt but in fact, in a worst case scenario, we can do it for free although I don’t foresee that.
Q: When you say you can offer for free, what do you mean?
A: I mean the investment had already sunk in, and we are paid more for commercial services, like selling insurance of RM 100 each. We charge the Govt RM 30 and that includes delivery.
Q: On foreign worker housing, what are your plans?
A: Every Govt project that had yet to start,will be placed on hold waiting for new Govt policies. Malacca is still ongoing but we haven’t started in Johor. We bought the land but construction had not. Malacca is rented from the State Govt, sub-leased.
Q: Are you going to make yourself politically neutral?
A: We believe no – we have to be close to the Govt of the day as we are a Govt e-service provider.
Q: Do you expect to see any changes in your shareholdings?
A: I believe I can still function. No need to see a change in shareholding. Next week we are hosting a Ramadan event for Tun M.
Q: How do you see the longer term outlook for your earnings?
A: I cannot say because I don’t know what the Govt policies are going to be. So right now, I have no idea – we are just continuing to do BAU. All these contracts are under the e-Govt flagship but some of our services are added on – I am not sure the added on services can be of open tender.
Q: The projects are all direct negotiations?
A: No, we have never had to go on direct negotiations.
Q: Will there be any changes in your subsidiary companies?
A: Yes, definitely that will change. Where things are no longer viable, then things have to be written off.
Q: What is the value of the write-off?
A: Small, less than RM 10 million for 60%.
Q: Who are the shareholders? Opposition?
A: You said it. I didn’t say.
Q: Can you tell us a bit about the Philippines?
A: We work with a few agencies there now – police dept, labour dept and the cities. We started in Quezon City. We do about 20 thousand transactions per day. So for the police dept – every person with a valid job has to have a certificate of conduct. We make US$0.50 per transaction but this is not the primary source of income. We want to add to it and sell commercial products.
Q: How much do you own?
A: We own 40% – this is the cap for foreign companies in Phils. The balance 60% is a group of entrepreneurs. Softbank has a small stake too.
Q: Are you thinking of other markets?
A: We are thinking of countries with >100 million in population. We need to partner with someone who can get us a Govt approval. Indonesia is interesting but difficult – the local councils have a lot of authority so it makes it difficult.
Q: In terms of disclosure going forward, will you disclose more?
A: Do you find that our disclosures are not sufficient?
Q: Like segmental breakdown.
A: But we can’t disclose by agencies as it may be sensitive and can attract more attention to the agencies.
Q: What sort of margins are you looking at?
A: Around 50% which I guess is normal for tech companies
Q: How many in your foreign worker database?
A: 1.5-1.7m but the dropout rate is quite high.
Q: What is your foreign shareholding?
A: I don’t know. Around 20%. or 30%.
Q: Do you expect the amnesty program to continue?
A: It has been replaced by the job-matching.
Q: Do you think the Govt will take it back and do themselves?
A: I don’t think so. They have tried and they have failed.
Q: Can the Govt make you share your intellectual property?
A: Like source codes? It is probably easier for them to start from scratch. Difficult to work from source codes.
Q: Will you lose your e-Govt services?
A: I don’t think that will happen.
Q: How much does Govt related services contribute to revs?
A: Less than 20%
Q: Do you see any new opportunities with the new Govt?
A: I am a guy who sees opportunities in everything, upside downside….. The structure of the country is still the same. I mean our next bet is on blockchain technologies and AR/IR.
Q: Would you consider selling MYEG?
A: Yes of course if I can’t get the relationship necessary then I would but it hasn’t occurred to me yet.
Q: Will you look to renew the concessions?
A: Yes we will, but not yet.
Q: Have you started any conversation with the Govt?
A; No, not yet.
Q: Do you think the Philippines business can be as big as Malaysia?
A: They have a bigger population than Malaysia. Of course.
Q: How long do you think it will take to build Philippines to Malaysia’s scale?
A: Probably 3 years
Q: You mentioned blockchain. Is that crypto?
A: My strategy has always been to stick to e-govt even for blockchains. The underlying services is still Govt-related like remittances for foreign workers. Until 2 weeks ago, the plan is to use blockchain-based product to enable remittances.
Q: What else do you do at the foreign workers hostels other than sell the bed?
A: SIM card top-ups, sell instant noodles…..
Q: How many placements do you do a month?
A: A few thousand, mainly in manufacturing… services.
Q: You charge RM 1,900?
A: Yes, RM 1,900 per placement. We keep 60-70% net of our costs.
Q: How will that change?
A: It is not a Govt service – Someone wants a FW, we match them with one and that’s it.
Q: Why would they stop it?
A: That’s why I don’t think they would. Unless they don’t like my face.
Q: OK what…..
A: Ya, that’s what I think too…. that’s also what my mother tells me.
Q: Can you give more colour on your Chairman Norraesah and Tun M?
A: Back in those days, when she didn’t win in elections, Tun M appointed her to the Supreme Council. So she knows many in the Govt. We have another director who is the Treasurer of an NGO, PERKIM (Muslim Welfare Association) which Tun M is chairman. And that is the event we are hosting next week for Tun M.
Q: Any concerns in the share price movement?
A: My philosophy is that things can be good or bad. Do I think we have peaked? I always think we can do better.

Like our page to get more these
Make the next post easily visible from your Facebook!
You can visit us at