New contract helped boost MYEG 0138 MY E.G. SERVICES BERHAD share price. More good news to come?

 New contract helped boost  MYEG 0138 MY E.G. SERVICES BERHAD share price. More good news to come?


After bearing the brunt of negative news last month, MyEG Services Bhd is getting some good news.


The counter rose 13.6% to close at 88 sen on April 13 following news of the company securing a job to build as well as manage and operate the workers village and related facilities at at Batu Kawan Industrial Park 3 (BKIP 3), Mukim 14, Bukit Tambun, Seberang Perai Selatan, Pulau Pinang.


The completed workers village is estimated to accommodate 7,500 foreign workers and will comply with Jabatan Tenaga Kerja Semenanjung Malaysia guidelines as well as certified with GreenRE.


Investors are already excited even though there wasn’t any contract value being revealed.


Does the piece of news warrant such high movement and trading value as well.


This is because investors are expecting the job will add on around RM100 million a year to MyEG revenue


There are some speculation that 7,500 workers is just initial phase wheby the final phase will be for 45,000 workers.


If it really RM100 million being added to MyEG’s topline, then revenue should increase some 15%, just from this job alone


Factoring other businesses, MyEG should show some solid numbers in FY23.


For the financial year ended Dec 31, 2022, MyEG’s net profit came in slightly higher at RM398.7 million from RM316 million.


This is despite posting a lower revenue of RM651.2 million from RM724.4 million.


There are 2 main reason dragging its revenue:


    Cessation of revenue contribution from COVID-19 health screening and quarantine in Q4 FY2022 as the Government had lifted health screening and quarantine requirements.as compared to Q4 FY2021 when Government closed down its quarantine centers and allowed private quarantine arrangements to be made
    Impairment in its investment in Agmo Holdings Berhad as a result of mark-to-market practice.


While the counter has trended upwards, it is still way below its 52-week high of RM1.02 but has recovered from its low of 57 sen.


Surely, bets are on MyEG to continue its upward trend although there could be some selling pressure as investors take profit.


In the near term, analysts expect MyEG to be well-positioned for robust growth in the next 2-3 years, buoyed by the tremendous earnings potential from Zetrix and continued high demand for Malaysian e-government services.
#MYEG

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