MyEG’s local business to remain resilient

KUCHING: My EG Services Bhd’s (MyEG) local business has been projected to remain resilient, in view of the group’s good track record of providing the online services.

The research arm of MIDF Amanah Investment Bank Bhd ( MIDF Research) noted that MYEG displayed business resiliency despite the Covid19 crisis as the first quarter of financial year 2020 (1QFY20) revenue remained steady at RM121.7 million.

Additionally, MyEG’s 1QFY20 normalised earnings of RM59 million met MIDF Research’s expectations.

“All in, the group’s 1QFY20 financial performance came in within ours and consensus expectations, accounting for 22.9 per cent and 22.2 per cent of full year FY20 earnings estimates,” the research arm said.

“We expect the local business to remain resilient, in view of the good track record of providing the online services.”

Moving forward, MIDF Research expected MyEG’s earnings growth will stem from the group’s effort to replicate its offerings in the region.

“The effort has started to bear fruit as seen in its latest progress in Indonesia and the Philippines.

“We believe the move would also help to reduce the group’s reliance on the local market.”

The research arm also noted that the MyEG business model remains attractive which garners a healthy profit margin of about 50 per cent.

Overall, MIDF Research maintained its earnings estimates at this juncture, with normalised profit after tax after non-controlling interest at RM257.6 million in 2020F, RM271.7 million (2021F) and RM289.7 million (2022F).