MYEG dives 26.7pct, services under Immigration Dept by 2025

MY EG Services Bhd (MYEG) tumbled 25.5 sen, or 26.7 percent, to 70 sen today with trading volume exceeding 1.01 billion shares as nervous investors offloaded the company’s shares on news that all immigration services and processes will be back fully under the Immigration Department’s management by 2025.

MYEG opened 30 sen, or 31.41 percent weaker, at 65.5 sen today from 95.5 sen at the close last Friday.

Earlier, Bursa Malaysia suspended the short-selling of MYEG shares for the rest of the day under proprietary day trading (PDT) and intraday short selling (IDSS) after its stock dropped more than 15 sen, or 15 percent, from the reference price.

Trading of the e-government services provider’s shares and structured warrants had also been halted from 2.44pm to 3.44pm today.

MIDF Research warns that the change in policy would negatively impact third-party entities like MYEG, which currently handles immigration services.

“If the immigration services are transferred back to the Immigration Department as planned, it could potentially leave a negative impact on MYEG’s revenue in the long term, (with) lower potential net income by almost 20 percent after 2025.

“In contrast, if immigration is unable to deploy the NIISe (National Integrated Immigration System) by 2025, this will provide a better outlook for MYEG as it will prolong the schedule for foreign workers’ work permit renewal services to return to the Immigration Department,” said the research firm in a note today.

It noted that immigration services generated around 40 percent of MYEG’s income, including the renewal of foreign workers’ work permits, which accounted for about 10 percent of overall revenue.

Additional services such as insurance renewal and job matching services for foreign workers contributed about 30 percent.

MIDF Research said “the policy risks likely deter investors from MYEG, especially considering the significant contribution of immigration-related services to its revenue.

“Yet, MYEG’s stable earnings forecast for 2022-2023, steady sales from its road transport businesses, and potential new business opportunities from the NIISe and initiatives such as the JPJ e-testing system and blockchain projects, could support its share price,” it added.

As such, MIDF has maintained its “buy” call on MYEG with a lower target price of RM1.00 from RM 1.23 previously.

In a filing with Bursa Malaysia earlier, MYEG clarified that the company has not held any meeting with either the Ministry of Home Affairs or the Immigration Department of Malaysia on the plan to converge all immigration transactions under the NIISe.

Under the NIISe, the Immigration Department will handle all immigration processes including visa applications, work permit requests, passport renewals, and more.

- Bernama