KUALA LUMPUR: Things are turning brighter for My EG Services Bhd
's immigration business after securing the tender to establish the worker's village in Batu Kawan Industrial Park 3 in Pulau Pinang, says Malaysian Industrial Development Finance (MIDF) Research.
According to the research firm, the workers village, which is expected to provide accommodation to a workforce of 7,500 foreign workers, could yield benefits for the group's immigration segment, which accounts for about 35% of its total revenue.
Under the terms of the project, MY EG Lodging Sdn Bhd will be granted a lease for an expansive 8.39-acre plot of land with a value of RM20.4mil, for a period of 30 years.
As per the agreement, MY EG Lodging will be responsible for the construction, completion, management, and operation of the workers village and related facilities, entirely at its own cost.
The latest develoment helps to offset concerns over the as-yet unconfirmed rollout of the government's National Integrated Immigration System (NIISe).
MYEG was landed a blow in February when the Immigration Department director-general announced that the implementation of NIISe would pave the way for the centralisation of immigration services under the government by 2025.
However, it has since been reported that the NIISe project has fallen behind schedule and runs the risk of being scrapped.
In a March 13 update. the research firm cited some media sources as saying that only 10% of the project had been completed, and if cancelled, could see MyEG securing an extension to its services as a vendor of the current myIMMs immigration system.
Also in March, Home Affairs Minister Datuk Seri Saifuddin Nasution Ismail said it would submit a memo on the NIISe project to the cabinet in April.
In light of these developments, MIDF maintained its "buy" recommendation on MYEG with an unchanged target price of RM1.
"Despite the current lack of decision on the NIISe project, we believe MYEG's impressive track record makes it unlikely to hinder their ability to secure another three-year extension for their e-government concession in May 2023," it said.
It added that it is optimistic about the group's innovative initiatives in spearheading blockchain solutions, which are expected to drive sustainable growth in the mid-to-long-term, along with strategic expansion in existing business segments.
