MyEG rises further in continued heavy trading

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KUALA LUMPUR (Sept 5): My EG Services Bhd (MyEG) came under fresh buying interest today, emerging as the most active counter on Bursa Malaysia.

A total of 90.6 million shares had changed hands as at 3.25pm.

The stock was up six sen or 3.77% at RM1.65 after rising to RM1.69, its highest level since hitting limit down at RM1.81 on May 14.

The stock has seen a gradual recovery after a massive selldown following the 14th general election.

Bloomberg data shows that seven research houses are covering this stock, with four buy calls, two hold calls and one sell call, and the target price ranges from RM1 to RM2.60.

In a research note on Monday, CIMB IB Research analyst Nigel Foo said re-rating catalysts include securing the sales and services tax contract and a new module for foreign workers.

"MyEG recently submitted a proposal to the government for a new module related to foreign workers. If successful, the company becomes a 'one-stop centre' and it could be a major revenue generator for the group. We have not assumed any potential earnings from this proposed new module," said Foo.

Additionally, the outlook for the Philippines joint venture has broken even this year in less than two years of commencing operations and could be a major revenue generator over the next few years.

The group is also expected to launch e-government services in Bangladesh by year-end, he added.

While the company's previous GST monitoring system project had been cancelled after the general election, Foo noted that it could still be used to track the collection of SST in real time.

He added that a decision will be made by the new government whether to use MyEG's system over the next few months.