KUALA LUMPUR, May 31 — Maybank Investment Bank Bhd (Maybank IB) has raised its earnings forecasts for MyEG Services Bhd (MyEG) for the financial year 2023 (FY2023), 2024 (FY2024) and 2025 (FY2025) by 8 per cent, 11 per cent and 12 per cent, respectively.
In a research note today, the investment bank said the upward forecasts were made as it upgraded the earnings before interest, taxes, depreciation and amortisation (EBITDA) margin assumption to 67-68 per cent from 62-63 per cent.
“We expect the decent performance from the immigration (segment) to sustain coupled with higher revenues from the new cross-border blockchain solutions (related to its) Malaysia-China Customs (deal) and supply chain financing, both of which could cushion the declining Road Transport Department Malaysia (JPJ)-related services as digital adoption rises,” it said.
In a filing with Bursa Malaysia yesterday, MyEG’s net profit for the first quarter (1Q) of FY2023 rose to RM105.94 million from RM84.63 million in the same quarter last year on an overall increase in revenue from existing services with higher margins, offsetting the cessation of revenue contribution from the health screening and quarantine services.
Its 1Q FY2023 revenue grew to RM173.22 million versus RM161.77 million in 1Q FY2022.
Maybank IB said MyEG’s 1Q earnings exceeded expectations due to stronger-than-expected margins and stable JPJ-related business despite recent policy headwinds.
Hence, the bank also upgraded MyEG to a “buy” call from “hold” as the recent share price weakness provided a greater upside to its new target price of RM1.03 (+10 sen).
At 12.10pm, MyEG shares rose 4.5 sen to 83.5 sen with 137 million shares transacted. — Bernama
