MyEG posts steady quarterly performance

MIDF Research said there could be further upside to the company’s earnings from the upcoming launch of cross-border trade facilitation services with China and the Philippines.

PETALING JAYA: Analysts are upbeat about MyEG Services Bhd as the company’s financial performance for the first half of this year came in better-than-expected.

MIDF Research said the digital services company recorded RM217.5mil for its first half earnings, on the back of strong profit margin.

“MyEG’s profit margin hit 60% due to lower operating expenses. Its second-quarter earnings improved 25.9% to RM111.6mil. This was on the back of an overall increase in revenue, as well as contribution from the newly launched Zetrix blockchain platform and the sale of its tokens,” it said.

Zetrix has been integrated with China’s national blockchain platform, Xing Huo, which will allow cross border trade.

Additionally, MyEG had a steady quarterly performance, posting a revenue and net profit of RM184.9mil and RM111.6mil, respectively, for the second quarter ended June 30, 2023.

It declared a first interim dividend of 0.25 sen in the second quarter which was equivalent to last year.

The research house also noted that besides its e-government services, the company also aims to expand its earnings both locally and regionally with the future launch of cross-border trade facilitation services with China and the Philippines.

MIDF Research said there could be further upside to the company’s earnings from this upcoming launch.

MIDF Research said in view of the healthier profit margin, it is revising upwards its earnings estimates for its financial year 2023 (FY23) to FY25 to between RM419.8mil and RM483.3mil, minus the potential contribution from cross-border trade facilitation services. However, MIDF Research said despite expecting better earnings, it will lower its target price from RM1 to 97 sen.In a filing with Bursa Malaysia following the announcement of its latest financial results, MyEG said it will continue introducing innovative services by leveraging on new technologies, specifically blockchain or Web 3.0, in Malaysia as well as globally, to drive our organic growth this year.“With its Layer 1 blockchain platform namely Zetrix coming online, there is a huge potential for MyEG to commercialise innovative services as Web 3.0 becomes widely adopted.

“Furthermore, Zetrix has also been integrated with China’s national blockchain platform, namely Xing Huo which will allow ease of cross-border trade to take place and it will be the group’s foray into the global market.”

Barring any unforeseen circumstances, MyEG said it is cautiously optimistic that the long-term outlook remains positive, as it continues to introduce innovative services in Malaysia as well as globally.