My EG Services: Target price of RM1.42.
My EG Services remains a top pick due to its strategic investments in the Zetrix blockchain venture, which is expected to bolster future growth. The company maintains a target price of RM1.42.
Financial Results: Strong revenue generation from digital services and government contracts.
Stock Impact: The blockchain venture is likely to significantly enhance the company’s growth trajectory.
Earnings Revisions/Risks: Stable cash flows and continued government support reduce risk exposure.
Valuation: Trading at RM0.895 with a target price of RM1.42, providing a strong investment opportunity.
Catalysts: Growth in the blockchain sector and stable government contracts.
My EG Services (MYEG MK)
Redefining Progress With Blockchain
Over the past three years, My EG Services (MYEG) has heavily invested in its Zetrix blockchain venture, initially met with skepticism. However, MYEG has made essential strides, achieving key milestones and reporting sequential earnings growth. The recent commercial launch of Zetrix’s cross-border services ensures stable recurring revenue and healthy cash flows. MYEG has maintained its “BUY” rating, with a target price of RM1.42.
Timely Development of Blockchain Applications
MYEG is at the forefront of blockchain technology, having developed Zetrix, which launched several commercial applications this year. These applications include partnerships with state-owned enterprises in China, the Malaysian trade ministry, and the Philippines’ customs bureau. This strategic adoption of blockchain for government-to-government (G2G) cross-border services will anchor MYEG’s long-term growth prospects. The company invested over RM1 billion in developing the Zetrix blockchain, which offers services such as the Ztrade platform in China’s customs, certificate of origin authentication, verifiable credentials (VC), and blockchain-based digital signing.
Financial Impact of Blockchain Expansion
With the commercial launch of Ztrade’s cross-border services, MYEG expects to generate significant revenues. MYEG anticipates over RM650 million annually from charging gas fees, service fees per credential, and annual fees. The company also expects 4.5-5.0 million Zetrix coin sales in 2024-25 at an average price of US$12, translating into a profit before tax (PBT) of RM200-220 million .
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