KUALA LUMPUR: MyEG Services Bhd, which has for years handled the Immigration Department's visa applications, insinuated that it had its rug pulled from under its feet as there had been no precursor to the decision to end its contract.
In a filing to Bursa Malaysia yesterday, MyEG said it had not held any meeting with the Home Ministry or the Immigration Department on the intention to converge all of the department's transactions under a new system.
"The board will release the necessary announcements in a timely manner to Bursa Malaysia should there be any material information which falls under the Main Market Listing Requirements," it said.
This followed news that all Immigration processes will be converged under the National Integrated Immigration System (NIISe).
There have been suggestions that a winner could emerge from this news — Iris Corp Bhd, which is developing NIISe.
News of the convergence under NIISe yesterday caused a slump in MyEG and Datasonic Group Bhd shares.
However, the news benefited Iris Corp, placing the company among the top gainers in Bursa Malaysia trading.
MyEG shrank as much as 19.5 sen, or 20.42 per cent, to 76 sen in early trade, which prompted Bursa Malaysia to suspend the short selling of the stock under proprietary day trading and intraday short selling rules until this morning.
The stock ended the day 25.5 sen, or 26.7 per cent, lower at 70 sen yesterday.
Datasonic closed 3.5 sen, or 7.07 per cent, lower at 46 sen, Dagang NeXchange Bhd, which also has government contract exposure, slipped 2.5 sen, or 3.7 per cent, to 65 sen and AwanBiru Technology Bhd (formerly known as Prestariang Bhd), gave up 0.5 sen, or 1.23 per cent, to 40 sen.
However, Iris rose four sen, or 32 per cent, to 16.5 sen.
Meanwhile, Affin Hwang Capital downgraded MyEG to "hold" from "buy" with a lower target price of 93 sen from RM1.23 on heightened policy risks.
"Broadly, we expect the news and policy risks to weaken investors' interest in MyEG, considering the material revenue contribution from its Immigration-related businesses.
"On the other hand, MyEG's steady 2022-2024 earnings outlook, stable revenue from the road-transport businesses, exciting new business opportunities, and potential business opportunities from NIISe related works should help support its share price," it said in a note.
Affin Hwang, however, maintained MyEG's 2022-2024 earnings forecasts.
"We now peg our price target at 19x 2023 price-earnings ratio (PER) (from 25x), in line with MyEG's five-year average PER.
NIISe will replace the current Malaysian Immigration System (myIMMS) that the Immigration Department has been using for the past 13 years.
On the department website, one Ruslan Atan was listed as the person overseeing the NIISe project.
The New Straits Times reported on Monday that by 2025, all immigration-related affairs, including those now managed by outside parties such as MyEG, would revert to the Immigration Department.
Besides passport renewals and visa applications, applications and renewals of foreign worker and maid permits would be handled by the department after it had rolled out NIISe, said Immigration director-general Datuk Khairul Dzaimee Daud.
Khairul Dzaimee had said the Home Ministry had set aside RM900 million for the NIISe roll-out in two years, adding that the new system was expected to be a game-changer that would improve the department's efficiency and customer experience.
MyEG, which was founded in 2000, had been tasked with handling the Immigration Department's foreign workers permit renewal services and this had contributed significantly to its earnings.
In 2015, the government agreed to pay the employers' MyEG online foreign workers permit renewal processing fee of RM35 per foreign worker to the company.
This then was on top of the RM70 per foreign worker from the sale of the compulsory foreign worker's insurance coverage annually.
There are currently 2.5 million legal foreign workers in the country.
