KUALA LUMPUR (March 11): HeiTech Padu Bhd announced on Monday that it has secured a contract extension worth RM13.11 million for the provision of maintenance services to the Malaysian Immigration System (MyIMMs).
The announcement came shortly after the disclosure that e-government services solutions provider MyEG Services Bhd has emerged as a substantial shareholder in HeiTech following the acquisition of a 14.4% stake.
The contract extension is for a one-year period starting from Feb 18, and any further renewal or extension will be at the discretion of the government, said HeiTech Padu in a stock exchange filing.
HeiTech, a system integration and application development solutions provider, first secured the contract in March 2021. Worth RM33.92 million, the contract was for a three-year period until Feb 17, 2024.
The extension came amid the government's selection process for the development of the National Integrated Immigration System (NIISe) to replace MyIMMs, which Home Minister Datuk Seri Saifuddin Nasution Ismail reportedly said was outdated and no longer capable of meeting future immigration needs.
The Edge recently reported that HeiTech is among three companies shortlisted by the government to develop the NIISe project, which is understood to be worth over RM1 billion.
Shares of HeiTech jumped 54 sen or 22% on Monday to close at a record high of RM2.99, giving the group a market capitalisation of RM302.66 million.
The counter has seen a steep climb over the last 30 days, more than doubling from RM1.22 on Feb 9.
Earlier on Monday, MyEG disclosed that it acquired the 14.4% stake in HeiTech on March 7 for RM31.25 million as part of a strategic investment.
That translates to an average of RM2.14 per HeiTech share, or 7.8% premium to the counter’s closing price of RM1.99 on March 7.
But based on Monday’s closing price, MyEG’s stake has appreciated by nearly 40% in just two trading days.
HeiTech recently announced its first quarterly net profit after six consecutive quarters of losses. The group posted a net profit of RM16.42 million for the fourth quarter ended Dec 31, 2023 (4QFY2023), versus a net loss of RM6.69 million a year earlier, while revenue grew 17% to RM86.92 million from RM74.27 million.
For the full year, HeiTech recorded a net profit of RM7.22 million compared with a net loss of RM9.87 million in FY2022, despite revenue dropping by 5.4% to RM277.86 million from RM293.85 million. The group attributed better margin to its improved profitability.
HeiTech Padu’s latest annual report listed its former chief executive officer Datuk Seri Mohd Hilmey Mohd Taib as the group's largest shareholder, with a 3.82% direct stake and RM14.2% indirect interest as at March 21, 2023.
Mohd Hilmey, 70, however resigned in October last year due to “personal commitment”, and was succeeded by his daughter Salmi Nadia Mohd Hilmey.