MyEG shares jump after Government contract

KUALA LUMPUR: Shares of MyEG Services surged at mid-morning on Wednesday after it was appointed by the government to compile and maintain database on the country’s foreign workers.

At 11.12am, it shares rose 14 sen to RM4.41 with some 1.14 million shares traded between RM4.29 and RM4.42. 

The FBM KLCI was down 8.72 points to 1,707.86. Turnover was 613.2 million shares valued at RM564.3mil. There were 214 gainers, 284 decliners and 265 counters unchanged.

CIMB Research in a note said that it has raised MyEG's target price from RM5.28 to RM7.80.

It said the database will come from employers of foreign workers that must use MyEG’s online foreign workers work permit renewal services (FWPR) from 2015 onwards.

“We bump up our EPS forecasts by 38%-63% to reflect higher earnings mainly from the FWPR. This raises our target price, which remains pegged to its peers’ 21 times CY16 price-to-earnings (P/E),” it said on Wednesday.

It added that MyEG’s current valuation of 11.7 times 2016 P/E looks attractive and this does not include potential earnings from the proposed road safety diagnostic kit project (RSDS). 

"We also note that the stock will go ex of its 1:1 bonus issue on 8 Jan (this Thursday),” it said.