KUALA LUMPUR (May 5): MyEG Services Bhd (MYEG) shares and structured warrants rose following clarity on the company's online service for foreign worker permit renewal in Malaysia.
Last week, MYEG (fundamental: 3; valuation: 1.1) said the permit renewal would done entirely online starting from last Saturday (May 2). MYEG said the government would bear the RM35 convenience fee charged by MYEG; hence, the processing fee for each permit renewal remains at RM125.
Today, MYEG shares rose five sen or 2% at 12.30pm to RM2.58, giving the company a RM3.1 billion market capitalisation.
Among MYEG structured warrants, MYEG-CJ was up 1.5 sen or 13% to settle at 13 sen while MYEG-CL rose one sen or 8% to 13 sen.
MYEG-CJ and MYEG-CL are issued by RHB Investment Bank Bhd and Macquarie Securities respectively.
At 3.43pm MYEG shares were trading at RM2.61, and both MYEG-CJ and MYEG-CL warrants were trading at 13 sen.
Analysts said the structured warrants had risen probably due to their liquidity and MYEG's business outlook.
“I’m not very certain why most of the warrants are up but it may be due to its liquidity and the company’s operations,” said an analyst.
Earlier, CIMG Investment Bank Bhd wrote in a research report dated April 24 that investors should remain invested in MYEG shares.
“The company is currently facing some challenges but management remains focused on resolving the issue.
“If we are right, the government is expecting to close the immigration counters soon. This will resolve concerns over the foreign workers permit renewal services and allow management to focus on customs service tax monitoring.” CIMB said.
CIMB has an “add” call on MYEG shares with a target price of RM3.54.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)