MYEG to seek extension of govt agreements

PETALINGJAYA: My E.G. Services Bhd (MYEG) saw its shares falling abruptly on Bursa Malaysia and ended the day 18 sen lower to RM1.30.

The firm, an online government services provider, had announced at the end of last week just before the long weekend that it had received a notice from the government to continue with the provision of e-government services until June 30.

The company had also received an official notification from the government to continue with the provision of immigration related services until further notice, it said in the Bursa Malaysia announcement on Friday.

“This is to allow the government sufficient time to finalise the status of the extension of these agreements subsequent to their expiry on

May 22, 2020,” it said.

MYEG said in the announcement that it is committed to pursuing the extension of these agreements from the government.

Pursuant to this latest corporate development, CIMB Research had yesterday downgraded MYEG from an “add” to a “hold” rating with a target price of RM1.46 following the recent outperformance in its share price.

“The stock has done relatively well, surging 86% from its year-low on March 23. We still peg our valuation to 22.4 times 2021 forecast price to earnings ratio (PER) which is a 40% premium over our technology sector target PER of 16 times given its superior profit margin among domestic IT sector providers,” it said.