Netx to raise RM15.36mil for GEM upgrade.

While the tender of e-visa contract has been delayed for months, we gather that the management still believes the current visa system must go as the incumbent’s concession is expiring in Oct 19 as well as various security lapses of the system. Management is guiding for tender to be open in Nov 19.

We are not perturbed by it as the 15% target has always been the case and current foreign worker of 2m is still below the cap of 2.2m, allowing a 10% growth. Our earnings growth is mainly attributed to higher job matching services thanks to the unfreezing of foreign worker intake since Jul 19. Consequently, we are expecting its first sequential growth in 4QFY19 since GE14 and a 20% earnings growth in FY20.