The research firms are bullish on the e-government services provider’s Zetrix cross-border trade clearance platform, and improved profit margins, driven by streamlined workforce activities.
While the 20% dip in its Q3 FY2023 results raised eyebrows, analysts were quick to underscore the group’s overall positive trajectory, painting a picture of resilience.
Net profit for the third quarter fell 20% year-on-year (y-o-y) to RM120 million from RM150.71 million in Q3 FY2022.
In a note, Maybank Investment Bank (Maybank IB) raised its TP to RM1.23 from RM1.16, attributing the adjustment to an upward revision of earnings forecasts for FY2023 to FY2025, ranging from 3% to 10%.
This optimistic outlook is based on positive sentiments towards Zetrix’s prospects.
“The boost is partly due to the sale of its Zetrix tokens. MyEG’s 5% quarter-on-quarter (q-o-q) increase was underpinned by a 30% sequential growth in decentralised finance segment contribution,” said Maybank IB.
Meanwhile, UOB Kay Hian revised MyEG’s TP to RM1.21 from RM1.18, pointing to the company’s seventh consecutive record core earnings in Q3 FY2023 and the potential of Zetrix “if executions are on-point”.
It said the Zetrix blockchain platform is set to achieve commercial integration with the customs departments of China and the Philippines between Q4 FY2023 and Q1 FY2024.
“The key scope of services includes the issuance and authentication of the certificate of origin (COO), smart contract information verification and blockchain-based digital signing,” it said.
The research house expects the sale of 5.5 million Zetrix tokens within this year.
Maybank IB and UOB Kay Hian project a consistent net profit margin for MyEG, expecting it to remain within the range of 54% to 57% for the financial years FY2023 to FY2025.
Q3 profit dip not an issue
Meanwhile, MIDF remains optimistic about MyEG, noting the 20% fall in its Q3 net profit was primarily due to the one-off gain of RM61.9 million from the listing of its investment in Agmo Holdings Bhd in Q3 FY2022.
“Excluding the one-off gain of RM61.9 million, the normalised earnings increased by +33.2% y-o-y. This was mainly attributable to the contribution from its Zetrix platform,” it said.
The research house maintained its TP at 97 sen as MyEG’s 9M FY2023 earnings came at 80.4% of its full-year forecast.
“We see little interruption to MyEG’s revenue generation capability at this juncture,” it said.
“This is because the group has received the extension from the Road Transport Department (JPJ) for a period of three years as well as the Immigration Department (for the immigration services contract) for two years,” it added.
MyEG received a three-year contract extension from JPJ to provide online services related to vehicle registration, driver and vehicle licensing, and payment of summons. The extended contract will run from May 23, 2023 to May 22, 2026.
Its shares ended 1 sen or 1.24% higher at 82 sen, valuing the group at RM6.12 billion.