KUALA LUMPUR (Dec 21): E-government services provider My E.G. Services Bhd (MyEG) saw its share price go up by 11 sen or 5.1% in active trade this morning to RM2.27, after the company had announced it would be acquiring a 23.5% stake in tech firm Stampede Holdings Sdn Bhd for RM10.41 million.

Stampede is a provider of a debt collection system called Volare that automates and standardises key collection process. It also owns Telefonix Sdn Bhd, a Voice over Internet Protocol (VoIP) telecommunication service provider.

In a note today, MIDF Amanah Investment Bank Bhd Research said that since MyEG is only acquiring an associate stake in Stampede, it does not expect the earnings contribution from the company to significantly impact the earnings of MyEG in the near term.

"We are of the view that the bulk of MyEG's earnings would still come from its traditional core businesses. As such, we are maintaining our earnings estimates at this juncture," it said.

MIDF Research said it is maintaining its "neutral" call on MyEG with a target price of RM2.10 per share.

"MyEG has an attractive business model which reaps a healthy profit margin of more than 50%. This will also be further supported by its foreign worker hostel accommodation business.

"While MyEG has been actively investing in various technology businesses such as Agmo Studios, FashionValet and Hurr.tv, we do not expect the earnings contribution from such investments to be meaningful in the near term.

"On another note, we expect dividend yield to remain unattractive at approximately 1%. In the absence of key rerating catalysts, we are maintaining our neutral recommendation on the stock," it said.

At 11.37 am, MyEG shares were trading at a high of RM2.27 with 11.21 million shares changing hands. The stock had hit a record high of RM2.37 on May 9, 2017.