Two-decade-old MyEG Services Bhd (MyEG) has stood the test of time as it continues to innovate and expand its services over the years. Since its inception in 2000, it has delivered a wide range of e-government as well as other digital services to the public.

Given its track record, MyEG has been in a sweet spot to secure e-government service contracts. The latest e-government job is the provision of an online payment system for inbound travellers to pay for Covid-19 test screening and quarantine charges, prior to their arrival in the country.

On top of that, MyEG has started offering online renewal of motorcycle road tax and competent driving licence (CDL) in an expansion of services provided for the Road Transport Department (JPJ).

CGS-CIMB Securities Sdn Bhd estimates that MyEG could see up to RM60 million in annual revenue from the new online renewal services for motorcyclists as it expects the company to capture up to 20% of the estimated 10 million motorcycle road tax renewals a year.

MyEG has been a service provider for JPJ since 2007. Its services include renewal of car road tax, summons checking and payment, computerised drivers’ theory testing as well as transfer of vehicle ownership.

MyEG has always been on its toes, ready to spread its wings in e-government services. This year, the company bought a 10% stake in Labuan-based S5 Holdings Inc for RM90 million from Merrington Assets Ltd, which is mainly involved in the provision of security technology, intellectual property and the development and customisation of solutions and systems.

In a bigger corporate exercise, S5 will be injected into Ancom Logistics Bhd as it seeks a backdoor listing on Bursa Malaysia. Being a shareholder of S5, MyEG will eventually be a substantial shareholder of Ancom Logistics should things go as planned.

Despite the ups and downs that the e-government service provider has been through over the past three years, it has been able to sustain a decent return on equity (ROE). In fact, its ROE is the highest among its peers with a market capitalisation of more than RM1 billion in the technology sector. And for that, MyEG walked away with the award for the highest ROE over three years in the technology sector at The Edge Billion Ringgit Club 2020.

The e-government service provider’s adjusted weighted ROE over three years stood at 32.9%. Its ROE came in at 42.3% in 2017, 18.4% in 2018 and 37.9% in 2019 based on annualised earnings.

MyEG changed its financial year-end twice in the past three years. As a result, the

assessment on its performance was based on annualised earnings for the financial year ended Sept 30, 2018 (FY2018) and the financial year ended Dec 31, 2019 (FY2019). The company posted an annualised profit after tax of

RM201.5 million in FY2017, RM103.2 million in FY2018 and RM242.3 million in FY2019.

Digital and commercial services accounted for about 80% of the group’s revenue in FY2019 while e-government services accounted for around 20%. MyEG’s revenue was contributed by its concession-related services such as those for the Immigration Department and JPJ and their related ancillary services.

Earnings were also derived from commercial offerings, which include motor vehicle trading related services, foreign worker recruitment, financing services and placement-related services.

It has been three volatile years for MyEG in terms of its share price performance. The stock took a nosedive in May 2018 shortly

after the general election to the 70 sen range before regaining some lost ground in the following year. Unfortunately, the fierce selldown triggered by the global equity rout dragged its share price below RM1 again, to 79.5 sen in March 2020, after it had stayed above RM1 for most of 2019.

Nonetheless, being resilient, MyEG bounced back to close at RM1.42 on June 30.