By BLOOMBERG / Pic By ISMAIL CHE RUS
SINGAPORE • Malaysia’s electronic government services provider MyEG Services Bhd is accelerating its overseas expansion to capture bigger opportunities beyond its home market.
The company’s business in the Philippines, its first international venture that started last year, is set to handle more transactions than Malaysia in two years, Wong Thean Soon (picture), founder and MD of the company, said in an interview by email.
It will start operating in Bangladesh by year-end, with Indonesia following soon after, he said.
“We expect overseas to be 20% of our revenues by 2020,” he said. Each of the Indonesia, Bangladesh and Philippines markets “have a much bigger population than Malaysia, hence the opportunity is also proportionally bigger”, he added.
The strategy to expand overseas is gaining traction at a time when shares of the online services provider have taken a beating amid investor concerns that a change of government might hurt business.
Its market value has more than halved since Prime Minister Tun Dr Mahathir Mohamad’s stunning election victory in May, that also sent the stock’s volatility level to a record high.
The company operates an online portal that allows Malaysians to conduct transactions with government agencies such as paying traffic summonses, renewing passports, foreign worker permits and identity card (IC) replacements, among others.
Malaysia currently accounts for all of MyEG’s revenue and profit but growth rates have retreated every quarter since September 2017, according to the data compiled by Bloomberg.
The company remains “cautiously optimistic” about working with the new government, it said in its June-quarter results filing on its website.
UOB Kay Hian Securities (M) Sdn Bhd analyst Vincent Khoo upgraded his recommendation yesterday on MyEG to ‘Buy’ from ‘Hold’, with a target price of RM1.62.
Analysts have raised their consensus one-year target estimate for the stock by 35% in the past three months.
The stock slid 4.9% to RM1.16 as of 11:21am local time in Kuala Lumpur yesterday. The shares are down 48% this year.
“Our intention is to replicate what we have done in Malaysia in these other emerging markets,” Wong said.
Here is what else Wong said in the interview:
• Focus on financial technology related commercial products and services will increase.
• National IC project will increase offerings of new online services.
• E- commerce tax isn’t expected “to have any material impact on the company” as it’s largely aimed at foreign entities.