Maybank IB Research kept its earnings for FY24 to FY26 pending the financial results briefing.
PETALING JAYA: MyEG Services Bhd’s (MyEG) cash flow and balance sheet have turned healthier with the disposal of digital assets and its blockchain developer Zetrix unfolding potential that is likely to boost its profitability.
According to UOB Kay Hian Research, MyEG’s balance sheet is healthier with RM575mil cash versus RM84mil at end-2023, on the back of better operating cash flow as earnings increased.
It said net gearing also improved to 0.26 times from end-23’s 0.35 times and it anticipates further improvement in MyEG’s cash flow and balance sheet as Zetrix continues to lift earnings.
For the third quarter of financial year 2024 (3Q24), MyEG delivered another record-high core net profit of RM170mil, reflecting robust Zetrix coin sales and growing services’ revenue, it said.
The strong earnings were also complemented by the e-government segment’s steady momentum. Arising from that, the research house raised its 2024 and 2025 earnings forecasts by 7% and 10% respectively to factor in stronger-than-expected contribution from the blockchain segment.
MIDF Research also adjusted its financial year 2024 (FY24) to FY26 earnings between a 7.1% and 13.4% increase as it factored in higher contributions from Zetrix which also commanded better profit margins.
Maybank IB Research kept its earnings for FY24 to FY26 pending the financial results briefing. It said given its attractive valuation (10.5 times FY25’s price earnings ratio) and compelling decentralised finance growth, it reiterated its “buy” call with an unchanged target price (TP) of RM1.68 a share.
UOB Kay Hian Research also maintained its “buy” call with a higher TP of RM1.46 a share from RM1.42 after recalibrating its earnings.
MIDF Research said despite higher earnings estimates, its TP has been adjusted to RM1.14 a share from RM1.38 previously. It said while Zetrix is currently the group’s main engine of growth, the offering of Ztrade services shows that it is still, to a certain extent, dependent on the government. Also, the existing offering of e-government services represents an inherent policy risk to the group. MyEG was appointed by Worldcoin to provide infrastructure services and operate the blockchain-enabled iris scanning (RM50 revenue per scan).
UOB Kay Hian Research said it understands that more than 100,000 sign-ups have been onboarded thus far, which roughly added RM5mil revenue to MyEG.
With more iris scanning deployed in recent months, it expects more registrations especially from rural areas and foreign workers. MyEG targets one million World ID registrations for 2024 to 2025.
