My E.G. gains 5.24% on foreign workers' permit renewal job scope expansion

-A +A

KUALA LUMPUR (Jan 20): My E.G. Services Bhd jumped as much as 5.24% after the concessionaire for Malaysian Electronic-Government announced the Federal Government has expanded its job scope in foreign workers' permit renewal.

As at 10.54am, the counter was traded at RM2.61, up 13 sen or 5.24% with 14.68 million shares done. It has a market capitalisation of RM3.09 billion.

The principal activity of My E.G. (fundamental score 2.6; valuation score 1.5) includes building, operating and owning the electronic channel to deliver services from various Government agencies to Malaysians.

In a statement on Jan 9, My E.G. had said the Immigration Department of Malaysia had since Jan 5 expanded its job scope under the online renewal of foreign worker permits.  

MyEG said its job scope now included helping the authorities idenfiy legal and illegal foreign workers here, and employers hiring these workers aside of permit renewal.

The Edge weekly's Frankly Speaking column highlighted how MyEG shares had risen last Wednesday (Jan 7) after CIMB Investment Bank Bhd said MyEG had been awarded the contract and that it would boost the company's earnings.

However, the management of the company clarified that there was no delay in announcing the online renewal of foreign maid and worker permits as the service has been available to the public on MYEG’s portal at www.myeg.com.my since 2011.

In a note to client today, CIMB Research maintained its earnings per share (EPS) forecasts and target price of RM3.90 on My E.G, based on 21 times calendar year 2016 (CY16) price to earnings ratio (P/E). 

"The successful launch of the custom service tax monitoring (CSTM) project and public acceptance of its foreign worker permit renewal services are potential re-rating catalysts for the stock," it added.