MyEG outlook hinges on CSTM

Publication: NST

Date of publication: Jan 10, 2014

Section heading: Business Times

Page number: 004

KUALA LUMPUR: Analysts say the future outlook for MyEG Services Bhd will largely depend on whether the custom service tax monitoring (CSTM) service successfully takes off in the coming quarters.

In its research report, CIMB Investment believes the market has factored in the growth potential of the voluntary vehicle transfer service (VVTS) and the foreign workers annual permit renewal services.

"As such, the stock's valuation is not cheap at price-earnings of 19.5 times for 2015 and the three-month delay for the CSTM launch is not material for the company.

"More importantly, the management's focus should be on the successful implementation of the CSTM over the next few months."

CIMB expects the CSTM service to face some teething problems initially and as such, an earnings contribution for MyEG in 2014 is unlikely.

"We are relieved that the demand for VVTS should finally take off as demand has been soft over the past few quarters," it said at the CIMB Corporate Day conference, here, yesterday. It has a target price of RM3.05 for MyEG and recommends shareholders to hold on to the stock.

At the conference, MyEG met 40 fund managers in a few small groups.

Investors' interest at the conference was focused on the CSTM and GST-related project..