KUALA LUMPUR (Aug 21): MyEG Services Bhd (KL:MYEG), which was the most actively traded stock Wednesday morning, posted record-high net profit and revenue for the second quarter ended June 30, 2024 (2QFY2024).
As at 10.30am, some 59 million shares changed hands. Its share price went up three sen to 93.5 sen, valuing the company at RM7.06 billion.
The stellar earning figures were mainly driven by its Zetrix blockchain platform, which includes services such as ZCert, digital ID registration and transactions, as well as the sale of Zetrix tokens.
Quarterly net profit surged 48% to RM165.42 million from RM111.56 million a year ago, as revenue grew 31% to RM242.28 million from RM184.88 million, according to the group’s filing with the stock exchange on Tuesday.
The e-government services provider declared a first interim single-tier dividend of 0.25 sen per share, to be paid on Nov 18.
MIDF Research foresees that Zetrix could potentially take over the overall income from e-government services, which is currently the core earnings contributor in MyEG.
"At the current rate, we view that there is a high chance that earnings from Zetrix would take over the overall income from e-government services," it said.
MIDF is maintaining its 'buy' recommendation with an unchanged target price of RM1.38.
Meanwhile, BIMB Securities Research (BIMB) said that MyEG is well positioned to maintain its growth trajectory by leveraging emerging technologies.
"In the light of the stronger than expected performance and the rise of Zetrix token price, which has more than tripled from US$5 to US$17, we have revised our earnings estimates for FY2024-FY2026," BIMB Securities wrote in the latest quarterly result.
BIMB forecasts MyEG to post core net profit of RM625.4 million in FY2024 versus consensus estimate of RM591 million, and RM667.4 million in FY2025 and RM718.8 million in FY2026.
This translates into earnings per share of 8.4 sen in FY2024, nine sen in FY2025 and 9.7 sen in FY2026.
BIMB has raised its target price to RM1.34 from RM1.21 previously, in line with the upward revision of its earnings forecasts. "Our target price is based on a five-year average forward price-earnings ratio of 16 times applied to FY2024 EPS of 8.4 sen," said BIMB.
For the cumulative six months ended June 30 (6MFY2024), MyEG’s net profit soared 47.76% to RM321.37 million from RM217.49 million. Revenue for 6MFY2024 also increased by 32.71% to RM475.24 million compared with RM358.1 million.
Looking ahead, MyEG said in the filing that it expects to continue introducing innovative services by leveraging new technologies, specifically blockchain and Web 3.0, both in Malaysia and globally, to drive its organic growth.
“With its Layer 1 blockchain platform namely Zetrix coming online, MyEG continues to commercialise innovative services as Web 3.0 becomes widely adopted.
“Furthermore, Zetrix has also been integrated with China’s national blockchain platform, namely 'Xing Huo' which will allow ease of cross border trade to take place and it will be the group’s foray into the global market,” the group added.