PETALING JAYA: MyEG Services Bhd is expected to benefit from the government’s announcement to implement blockchain technology on the handling of certificate of origins (COO) for Malaysian exports into China, says JP Morgan.
Earlier this month, the Investment, Trade and Industry Ministry (Miti) said the blockchain technology for the Preferential Certificate of Origin (PCO) system from China will facilitate the country’s exports to China.
By offering more efficient and secure processing of goods originating from Malaysia to China, the proposed single-window framework aims to improve trade facilitation and reduce technical barriers.
“While there were no explicit mentions of MyEG, we believe MyEG is the one leading the efforts of introducing COO into the blockchain via its Z-trade platform.
“The government is committed to supporting enterprises that have the technology to drive trade digitalisation, recognising the potential economic benefits such as trade expansion,” the research house said in a report recently.
JP Morgan said in its discussion with Miti minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz, the minister had highlighted the importance of a single-window framework to grow the country’s trade with its largest trading partner.
China makes up 14% of Malaysia’s total exports, with China-bound exports having grown by a 9% 10-year compound annual growth rate between 2012 and 2022, added the multinational financial services firm.
“MyEG recently signed a partnership agreement with a wholly-owned agency of China Customs to offer cross-border trade facilitation services via MyEG’s Zetrix blockchain.
“The most immediate use case is the application for COO, trade documents required to certify an export goods originating country for tariff designation/tracking,” JP Morgan said.
JP Morgan maintained an “overweight” call on MyEG with a target price of RM1 a share but cautioned concession renewal risk and political uncertainty as risks to its call.
