PETALING JAYA: Shares in MyEG Services Bhd jumped, as investors waded in to scoop up the stock at lower prices following Friday’s steep decline.
The stock was the most actively traded stock yesterday with 175.6 million shares changing hands. It shot up 25 sen, or 20%, to close at RM1.38.
The company told Bursa Malaysia after trading had ended on Friday that it had received a letter from the Malaysian Anti-Corruption Commission (MACC) confirming that it was not under investigation in relation to charges against former deputy prime minister Datuk Seri Dr Ahmad Zahid Hamidi.
“With the MACC’s clarification, we believe the recent price weakness could be an opportunity to accumulate the stock,” CIMB Research said in a note over the weekend.
MyEG’s share price declined to as low as RM1.05 on Friday after the company was implicated in the charges against Ahmad Zahid.
The stock was suspended on Friday afternoon. MyEG later issued several statements to clear up the matter. It said both the company and its board of directors have no knowledge of Mastoro Kenny IT Consultant & Services named in the charges against Ahmad Zahid.
CIMB Research, in its note, said investors should take advantage of the steep price decline.
“The key earnings driver for the stock in the 2019 and 2020 forecast is the online registration of new foreign workers (NFWs), for which MyEG had recently received approval from the government,” it said.
The research house said that assuming that MyEG recruits and registers 50,000 NFWs annually, the company could generate around RM100mil annually.
“We understand that the company can generate RM2,000 revenue per NFW.
“Assuming a 50% net profit margin, MyEG’s annual net profit could rise by RM50mil,” CIMB said.
The firm has kept its target price of RM1.81 for the stock, valuing the company at 21 times its projected earnings in the financial year ending Sept 30, 2019.
Shares in MyEG had already been battered once following the general election due to perceived links to the previous administration.
Meanwhile, Datasonic Group Bhd’s share price continued to be under pressure yesterday. Its share price tumbled 6.2% to close at 45.5 sen and was on the top volume list yesterday.
The company was also mentioned in the charges against Ahmad Zahid but denied any involvement last Friday in a Bursa Malaysia filing.
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