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Here’s an in-depth look at MY E.G. SERVICES BERHAD’s (MYEG) latest financial performance and strategic direction, as unveiled in their First Quarterly Report for the financial period ended 31 March 2025. As a leading e-government service provider in Malaysia, MYEG’s report offers a fascinating glimpse into its evolving business model, particularly its ambitious foray into the Web3 and Artificial Intelligence (AI) space.
This quarter’s report is a tale of robust growth in core services, coupled with significant strategic investments in cutting-edge technologies. While the numbers paint a positive picture of expansion, they also highlight the dynamic nature of new ventures and market shifts.
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MYEG’s Q1 2025 Report: Riding the Wave of Digital Transformation with Web3 and AI
MY E.G. SERVICES BERHAD (MYEG), a familiar name in Malaysia’s digital services landscape, has just released its First Quarterly Report for the financial period ended 31 March 2025. This report is more than just numbers; it’s a testament to the company’s strategic pivot towards next-generation technologies like Web3 and Artificial Intelligence (AI), aiming to redefine its growth trajectory.
The key takeaway from this quarter? MYEG has delivered a strong performance, showcasing impressive revenue and profit growth, largely driven by its innovative digital offerings. However, it also reveals the impact of market dynamics on its investment portfolio, a common consideration for companies expanding into new frontiers. Let’s dive deeper into the figures and strategic insights that caught our eye.
Financial Highlights: A Quarter of Strong Growth
MYEG has demonstrated commendable financial progress in the first quarter of 2025 when compared to the same period last year. Both revenue and profit after taxation saw significant increases, reflecting the company’s expanding service portfolio and digital adoption.
Q1 FY2025
Revenue: RM299.98 million
Profit After Taxation (PAT): RM181.57 million
Basic Earnings Per Share (EPS): 2.4 sen
Q1 FY2024
Revenue: RM232.96 million
Profit After Taxation (PAT): RM156.21 million
Basic Earnings Per Share (EPS): 2.1 sen
Breaking it down, revenue surged by approximately 28.8% to RM299.98 million, while profit after taxation climbed by about 16.2% to RM181.57 million. This positive trend is further reflected in the basic earnings per share, which rose from 2.1 sen to 2.4 sen.
When looking at the performance against the preceding quarter (Q4 FY2024), the consistency is evident. Revenue saw a modest increase of 2.20% from RM293.52 million, and PAT also edged up by 0.22% from RM181.17 million. This indicates a stable and sustained growth momentum.
What’s Driving the Growth?
The report attributes this impressive growth primarily to the burgeoning contribution from MYEG’s Web3 application services on the Zetrix blockchain platform. Services like ZTrade, ZCert, and Digital ID registration and transaction are gaining traction. Additionally, the sale of Zetrix tokens has also played a significant role in boosting the company’s top line.
However, it’s important to note that the increase in PAT was partially offset by an impairment loss of RM15.76 million. This loss stemmed from the recognition of an investment in HeiTech Padu Berhad, a result of standard mark-to-market accounting practices. If we were to exclude this impairment, the operating PAT for the current quarter would have been even higher, at RM197.33 million, compared to RM190.40 million in the previous quarter (excluding a similar impairment).
A Look at Financial Health: Balance Sheet and Cash Flow
MYEG’s balance sheet as of 31 March 2025 shows a healthy expansion, with total assets growing to RM4.54 billion from RM4.25 billion at the end of 2024. This growth is largely underpinned by a significant increase in development costs, which rose from RM1.85 billion to RM2.14 billion, indicating substantial ongoing investments in new projects and technologies.
Shareholders’ equity also saw a robust increase, climbing to RM3.19 billion from RM2.84 billion. This contributes to a higher net asset per share of 42.86 sen, up from 38.09 sen at the end of last year, signaling enhanced intrinsic value for shareholders.
On the cash flow front, MYEG generated RM161.02 million in net cash from operating activities. While this is lower than the RM315.78 million recorded in the same period last year, it’s important to consider the dynamics of working capital and the significant increase in development costs paid (RM294.44 million this quarter compared to RM139.13 million last year), which falls under investing activities. The company also saw a substantial inflow from financing activities, notably a private placement that raised RM190.71 million, bolstering its financial flexibility for future initiatives.
Strategic Vision: Web3, AI, and Global Ambitions
MYEG’s future prospects are firmly rooted in its commitment to innovation, particularly in the Web3 and AI domains. The company is actively pursuing several key initiatives to drive organic growth:
- Zetrix Commercialisation: MYEG expects to see widespread adoption and commercialisation of innovative services on its Zetrix blockchain platform.
- Malaysia Blockchain Infrastructure: The operationalisation of Malaysia Blockchain Infrastructure with MIMOS Technology Solutions Sdn Bhd is set to significantly enhance opportunities for Zetrix.
- Global Foray with China’s “Xing Huo”: A major strategic move is Zetrix’s integration with China’s national blockchain platform, “Xing Huo.” This integration is poised to facilitate cross-border trade, marking MYEG’s significant entry into the global market.
- Leveraging AI Technology: Recognizing the growing importance of AI, MYEG plans to develop “Agentic AI” – artificial intelligence capable of operating and performing tasks without human supervision. The launch of the China Asean AI Lab underscores its commitment to introducing relevant AI projects for future growth.
The Board expresses cautious optimism for MYEG’s long-term outlook, anticipating continued positive momentum as it introduces innovative services both in Malaysia and on the global stage. This strategic direction positions MYEG not just as a service provider, but as a key player in the evolving digital economy.
Returning Value to Shareholders: Dividends
While no dividends were paid during the first quarter of 2025, the Directors have proposed a final dividend of 2.49 sen per ordinary share for the financial year ended 31 December 2024. This represents an increase from the 1.68 sen proposed in 2023, reflecting the company’s improved performance and commitment to shareholder returns. This proposal awaits approval at the upcoming Annual General Meeting on 23 June 2025.
Summary and Outlook
MYEG’s Q1 FY2025 report showcases a company in dynamic transition. While its traditional e-government services continue to provide a strong foundation, the significant investments and strategic focus on Web3 and AI platforms like Zetrix are clearly shaping its future. The initial success in driving revenue from these new ventures is encouraging, signaling the potential for sustained growth in the coming years.
However, investors should also be mindful of the ongoing investment requirements and potential market volatility that can impact non-core investments, as evidenced by the impairment loss. The company’s ability to successfully scale its blockchain and AI initiatives globally will be crucial for its long-term success.
Key points from this report include:
- Robust revenue and profit growth driven by new Web3 application services and token sales.
- Significant strategic investment in development costs, particularly in blockchain and AI technologies.
- A clear strategic roadmap focusing on the commercialisation of Zetrix, integration with China’s national blockchain, and development of Agentic AI.
- A proposed higher dividend for the previous financial year, demonstrating commitment to shareholder returns.
- The impact of market-to-market adjustments on investment valuations, a factor to monitor in a dynamic market.
From a professional standpoint, MYEG’s proactive stance in embracing Web3 and AI is commendable. This strategic foresight positions the company at the forefront of digital innovation in Malaysia and potentially the broader ASEAN region. The substantial investment in development costs underscores their belief in these future growth engines, and early signs of revenue contribution from Zetrix are promising. While the journey into new technologies always comes with its share of challenges, MYEG appears to be navigating this transition with a clear vision and strong execution.
What are your thoughts on MYEG’s bold bet on blockchain and AI? Do you think the company can maintain this growth momentum as it expands its digital footprint globally?
Share your views in the comment section below!
Disclaimer: This blog post is for informational purposes only and should not be construed as investment advice. Always conduct your own due diligence before making any investment decisions.
