MYEG: Earnings Jumped

Results Update

In QE30/6/2016, MYEG's net profit rose 54% q-o-q or 122% y-o-y to RM51 million while revenue rose 24% q-o-q or 94% y-o-y to RM87 million. The increase in revenue and PAT was primarily attributable to an increase in revenue contribution from FWP and foreign worker rehiring program services; and contribution from our newly acquired subsidiary, Cardbiz Holding Sdn Bhd and its group of companies


Table: MYEG's last 8 quarters' P&L


Chart 1: MYEG's last 14 quarters' P&L

Valuation

MYEG (closed at RM2.18 last Friday) is now trading at a trailing PER of 36x (based on last 4 quarters' EPS of 5.95 sen). Based on average earning CAGR of 65% over the past 2 years, PEG ratio is comfortably below 1- which means that MYEG valuation is deemed 'attractive" for a growth stock.

Technical Outlook

MYEG has been in a steady uptrend after it broke above the resistance from the horizontal line at RM0.22.


Chart 2: MYEG's monthly chart as at Sep 2, 2016 (Source: ShareInvestor)

Since MYEG made a high of RM2.40 in early January this year, it has been sliding down in a channel. It made a low of RM1.70 in July and then rebounded strongly. In August, It broke above the downward channel at RM2.00. The stock could retest the January high of RM2.40 in the current rally.


Chart 3: MYEG's weekly chart as at Sep 2, 2016 (Source: ShareInvestor)

Conclusion

Based on good financial performance & condition, "attractive" valuation (supported by rapid growth) and positive technical outlook, MYEG could be a good stock for long-term investment. Good entry level is at RM2.10.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.