Monday December 1, 2008
Shareholders eager to find out MyEG’s new strategy
By DANNY YAP
SHAREHOLDERS of My E.G. Services Bhd (MyEG) will be keen to know at the company’s AGM this Friday the management’s strategy to sustain its impressive track record.
MyEG posted an impressive 51% jump in net profit in its first quarter to RM4.16mil compared with RM2.75mil in the previous year’s corresponding period.
Revenue increased 37% year-on-year to RM12.24mil from RM9.02mil previously.
However, last week, the Government announced that MyEg might not be the sole provider of its electronic services any longer as it planned to allow three other companies to offer such services for higher efficiency and greater network coverage.
Prior to the announcement, analysts covering the company had given the stock a thumbs-up, with many recommending a “buy”.
But this has changed as analysts as well as MyEG shareholders wonder how the company plans to prevent a fall in its future revenue and net profit, given that it has to share its pie with others.
The only consolation for MyEG (assuming the Government approves three other companies to provide e-services) is that it still has a good headstart over its rivals and it should take full advantage of its established position to further enhance its services so that it remains the preferred solutions provider.
MyEG was set up as a private limited company on Feb 17, 2000 as I.T. Marvel Sdn Bhd. Subsequently, the company changed its name to MyEG Dot Com Sdn Bhd in 2001.
On April 13, 2005, the company changed its status to a public company and assumed its present name.
It should be noted that in the early days, MyEG did have several competitors, especially in the provision of e-services to the Government, but managed to become the sole concessionaire over time.
A local analyst said MyEG now had to fight for every Government project.
“MyEG has to prove it is the most efficient provider to have strong market share, but that’s good for the industry and consumers,” he said.
He added that the company would have to step up its e-services in terms of efficiency and also look for revenue in other sectors, possibly new e-related private services, to support its future growth.