• Maintain BUY (TP: RM1.21). 1QFY24 marked another impressive quarter for MyEG Services Berhad (MyEG), achieving its second consecutive quarter with revenue exceeding the RM200mn mark, a level last reached in 2021. The organic revenue growth, which rose by +34.5% YoY, was mainly fueled by contributions from the Zetrix blockchain platform as well as the sale of Zetrix tokens. In tandem, net PAT surged by +48.8% YoY to RM156.21mn from RM105.3mn in the corresponding quarter. This performance was inline with our forecast at 29% but surpassed consensus estimates at 32%. We maintain our BUY recommendation for MyEG, with a higher TP of RM1.21 (from RM1.15), derived from 1-SD below 5-year average PER of 16x, applied to the FY24F EPS of 7.6sen.

• Key highlights. MyEG’s revenue in 1QFY24 surged by +34.5% YoY to RM232.96mn, up from RM173.22mn in 1QFY23. The group’s bottom-line also jumped by +48.8%, all thanks to the ongoing success of the Zetrix platform and its token sales. Additionally, revenue from contracts with customers outside Malaysia has been improving over the year. On QoQ basis, both revenue and PAT for 1QFY24 were higher by +4.9% and +4.1% respectively.

• Earnings Forecast. Despite the result came within our forecast, we revised our numbers for FY24F/FY25F/FY26F upwards by 4.7%/5.0%/4.5% respectively, in anticipation of higher Zetrix token’s sales.

• Outlook. Looking ahead, MyEG is poised to continue its growth trajectory by leveraging new technologies such as blockchain and Web 3.0. We believe the company has plans to introduce more innovative services both domestically and internationally. Over the long run, this is expected to offset the restrained growth within its traditional businesses. However, potential risks include regulatory changes and increasing competition in the blockchain space.

Source: BIMB Securities Research - 30 May 2024