KUALA LUMPUR (Aug 14): CGS-CIMB Research has maintained its “add” rating of MyEG Services Bhd, with an unchanged target price (TP) of RM1.80, as it sees the government allowing businesses to rehire foreign workers as a positive for the group’s job-matching business prospects.
The policy of rehiring foreign workers only applies to foreign workers who were previously retrenched within the same sector, but are still residing in the country with a legal working permit.
In a note yesterday, the research house said the latest development of allowing the re-employment of foreign workers within the country can help MyEG to reduce the impact of the foreign worker hiring freeze imposed since the start of the movement control order (MCO) period until the end of 2020.
The research house said the new policy will also potentially leverage MyEG's one-stop Covid-19 screening portal. The screening portal is an alternative channel for employers to register and arrange for testing of workers at a cost of RM150 per test.
CGS-CIMB said it had gathered that MyEG completed 100,000 Covid-19 tests booked via the portal since its launch in early-June. The company targets to carry out 500,000 test screenings this year.
Besides, the research house sees potential awards of contracts for the Visa Luar Negara and National Integrated Immigration System (NIIS) projects as rerating catalysts for the stock, while delays in the e-government service concession and failure to secure e-visa and NIIS contracts are key downside risks to its call.
At 11.16am today, MyEG had shed 1.42% or two sen to RM1.39, with a market capitalisation of RM4.99 billion.