KUALA LUMPUR (Sept 27): My EG Services Bhd’s (MyEG) GST monitoring (GSM) project’s Phase 1 nationwide launch is taking longer than expected and the target launch has now been pushed to end of 2017, past its initial target of June 2017, according to CIMB Research.

In a note today, CIMB Research said MyEG had faced some teething problems in the past few months during the installation of dongles at the older cash registers in F&B outlets around Klang Valley.

“However, it said all issues have been resolved. MyEG has so far installed 5,000 dongles in Klang Valley in F&B outlets and is targeting to install nationwide by year-end (our earlier target was Jun 2017),” CIMB Research added.

On the plus side however, CIMB Research said MyEG had recently started a new service to match employers with unregistered illegal foreign workers (IFWs) under the rehiring programme.

This service will allow employers to source new foreign workers from the existing IFW base, of which MyEG will receive RM1,000 for matching an employer with an IFW. MyEG is targeting to place out 100,000 foreign workers.

“We also expect the company to benefit from selling the compulsory foreign workers’ insurance to the employers. MyEG said it will ensure the welfare of foreign workers, by making sure their salaries are paid and there is no worker abuse by the employers.

“In our earnings forecast, we assume a more conservative average of 5,000 foreign workers monthly or 60,000 foreign workers annually. This would help MyEG generate an average annual revenue of RM60 million. We assume 50% net profit margin for the matching services (in line with the 50% net profit margin from existing foreign worker services) and an annual net profit of RM30 million,” CIMB Research said.

The research house maintains "Add" on the stock, with an increased target price of RM3.04, from RM2.68.

At 10.40am, MyEG gained 0.98% or 2 sen to RM2.05, with 2.03 million shares traded.