Maybank Investment Bank (Maybank IB) has raised its earnings forecast for My EG Services Bhd (MYEG) for 2023, 2024 and 2025 financial years by 3.0 per cent, 3.0 per cent and 7.0 per cent, respectively.
In a note today, the bank said that the recent slew of new contract wins further strengthens MYEG’s position in diversifying its revenue base amidst heightening policy risks that could impact its traditional businesses.
The latest being the Penang Development Corp contract to develop a new foreign worker village at Batu Kawan Industrial Park 3 in Penang. As per media reports yesterday, its sub-subsidiary MY EG Lodging is to construct, complete, manage and operate a workers’ village and related facilities entirely on its own cost.
Given Batu Kawan’s booming semiconductor development, Maybank IB expects a resilient rental demand for the hostel services. Since forming a partnership with China’s customs to offer blockchain-based cross-border trade facilitation services, MyEG has been engaging with all the relevant stakeholders, including shipping companies and freight forwarders to onboard and utilise the new system, Maybank IB said.
“Revenue contribution could kick in as early as May 2023 and we believe the adoption among business entities could rise in tandem with the development of regional free trade agreements,” said Maybank IB.
“While we raise financial year 2023-2025 earnings by 3-7 per cent and has a target price of RM0.93, we are downgrading the counter to hold, given the limited upside,” said Maybank IB.
At 10.50 am, MYEG shares declined 0.015 sen or 1.71per cent to RM0.86 with 141.78 million shares transacted.
