NEW players are entering the e-government services business fast and furiously.
This has certainly been a lucrative venture, going by the business that MyEG Services Bhd has built and the earnings secured.
While MyEG had enjoyed an almost monopolistic position in the market, the landscape seems to be one that is opening up.
Just this week, two new players – MyPay and ORION IXL BHD – came into the e-government fray.
More new players are expected to jump on the bandwagon considering that banks are able to provide most of the payment services for the new platforms.
Even new e-government portals are coming including the www.rilek.com.my.
Whether or not they can really make a dent in the e-government services is anybody’s guess. What is certain is that MyEG will be facing some real competition.
For now, MyPay appears to be a direct competitor and it looks set to take some of MyEG’s businesses away.
The MyPay portal is made and managed by private company Dapat Vista (M) Sdn Bhd, which is indirectly backed by Permodalan Nasional Bhd (PNB).
This could explain how MyPay has been working with government agencies since 2004 to provide SMS alert services.
Checks on the Companies Commission of Malaysia show that MyPay has two shareholders – Heitech Padu Bhd with 9.2 million shares, while Television Airtime Services Sdn Bhd which owns 2.3 million shares.
Heitech Padu’s major shareholder is Yayasan Pelaburan Bumiputra (YPB) with a 22.86% stake in the comopany.
Meanwhile, PNB is the investment subsidiary for YPB.
Furthermore, HeiTech Padu’s existing chairman Datuk Seri Mohd Hilmey Mohd Taib was previously group chief executive of PNB from 1995 to 1997.
The exuberance of HeiTech Padu’s new fortunes were evident when the stock hit limit up to 86 sen on volume of 4.59 million shares in the morning session yesterday. The stock was up 30 sen or 53.57% from the previous day’s closing of 56 sen.
Prior to the MyPay news, HeiTech Padu’s business and share price had been languishing.
While HeiTech Padu was listed on Nov 20, 2000, it was already the information technology arm of PNB since the 80s.
Subsequently, PNB did emerge as a substantial shareholder of Heitech Padu in 2008, but sold its stake a few years later.
HeiTech Padu’s core business is presently in systems integration, managed data centre services and managed network services.
There is nothing to shout about its earnings, as for the three quarters to Sept 30, 2018, it made a net profit of RM3.4mil on the back of RM304.57mil in revenue.
This could change if MyPay becomes a more significant business contributor.
For its financial year ended Dec 31, 2016, it made net profit of RM503,419 on the back of revenue of RM5.77mil. In FY17, it made net profit of RM590,297 on the back of RM4.75mil in revenue.
This would imply margins of some 10%.
At a press conference earlier this week, MyPay’s chief executive officer Nick Liew said Malaysians would soon be able to access a slew of government services online via their new integrated platform.
The service works as a one-stop portal for agencies such as the police, National Higher Education Fund, Election Commission, Road Transport Department and six others.
While the platform is currently in beta testing, it will be launched at the end of this month. It is also targeting to have a payment system that supports online banking, credit cards and e-wallets at launch.
While Liew said the overlaps with MyEG are slight, it would certainly appear that this platform has the same intentions as MyEG, which is to be a one-stop centre, catering more for individuals rather than businesses.
For instance, users can check the status of their driving licence or voter status, and pay MBPJ (Petaling Jaya City Council) parking fines.
Meanwhile, Orion IXL is eyeing the e-corporation market.
Its share price started moving from the 10.5 sen level in early Jan on rumours that it was securing a big government project.
As of Friday, Orion closed at 14.5 sen, which is a 40% jump from what it was in the beginning of the month.
Orion’s major shareholders are Yahya Razali and Shaharul Mohamad Shariff with a 8.54% and 6.17% stake respectively.
Whether it has bigger backers are for now unknown, but Orion did announce a 30% private placement to raise funds for the acquisition of Sukuniaga Sdn Bhd, a company which is involved in Orion’s new e-government project.
Unknown to the market, this plan was already hatching since Oct last year.
Last Oct, Sukaniaga entered into a service level agreement with MyAngkasa Holdings Sdn Bhd, a wholly-owned subsidiary of the Malaysian National Co-operative Movement for the development of a fintech system called ‘MyAngkasa Az-Zahara’ (MyAzZahra).
Then on Dec 21, Orion entered into a sale and purchase agreement to acquire 10% equity interest in Sukaniaga for RM10mil.
ANGKASA is the apex organisation for the co-op movement in Malaysia with 14,000 co-ops and 6.5 million members as at end-2017.
MyAzZahra uses big data, AI as well as blockchain technology to provide an end-to-end online loan application and approval system for MyAngkasa.
Under the service level agreement, Orion’s wholly-owned subsidiary Ganda Integrasi Sdn Bhd (GISB) will provide the MyAzZahra system to Sukaniaga. For every loan approved via MyAzZahra, Sukaniaga is entitled to 1.5% of total loan amount approved, while Sukaniaga will allocate 85% of its billings (1.275% of total loan amount) to GISB.
According to Orion, the MyAzZahra system is based on blockchain and big data analysis, and will incorporate an in-house credit rating engine based on AI.
“In addition, GISB’s services for the MyAzZahra system include providing the entire ecosystem from loan application, credit risk assessment and loan processing to disbursement. GISB also helps the co-ops source loans from banks and various financial institutions,” said analyst Nigel Foo in a Jan 11 report on Orion.
Foo said that over the next few months, the company plans to focus on the 8 to 12 largest credit co-ops that are responsible for around 80% of total co-op lending nationwide.
The numbers do look big.
According to the Co-operative Societies Commission of Malaysia (SKM) the country’s credit and non-credit co-ops lent out RM6.7bil in 2017, comprising mainly personal loans to government staff.
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