KUALA LUMPUR: MyEG Services Bhd does not see Tricubes Bhd as a “significant competitor”.
Tricubes recently secured a contract from the Royal Malaysian Police for the collection of and enquiries about traffic summonses.
“[Tricubes] primarily focus on click-and-pay services, which we are moving away from. The value-add for click-and-pay services is too low,” said Wong Thean Soon, MyEG managing director, after the company’s AGM yesterday.
Wong said MyEG, which provides e-service for several government departments, is shifting its focus to develop more complex services that have higher value creation, for which the company can charge a higher fee.
“Any service that involves a security document can be considered high value added,” said Wong, citing passports, MyKads, licences and permits as examples.
He noted that click-and-pay services might have very high transaction volumes but the fee is “very low”. In fact, click-and-pay services only contribute about 10% to MyEG’s profit.
To climb the value chain, MyEG is going to launch the second phase of its vehicle ownership transfer service next month. The service will allow the electronic transfer of ownership to eventual buyers, which is currently only available via Road Transport Department (RTD) counters.
Wong explained that the service is more complex than traditional click-and-pay services. It involves the transfer of road tax and registration on the RTD’s database.
Wong declined to give an earnings forecast for the new service, but he said the size of the market is roughly RM50 million a year and earnings would depend on how much of it MyEG can capture.
MyEG will charge users a RM25 convenience fee. Industry statistics indicate that there are one million car ownership transfers and one million motorcycle ownership transfers a year.
“RTD-related services contribute roughly 60% of MyEG’s revenue,” said Wong, who explained that MyEG has been providing services to the RTD for over 10 years and its products are well established. The first phase of the vehicle ownership transfer e-Government service, which MyEG is currently providing, only allows for the temporary transfer of ownership and liability to used car dealers.
Wong said the company is in talks with government departments to secure more projects. He said the company does not want to limit its services to only a few government departments.
“We aim to provide our services to all of them.”
He disclosed that there are several projects in the pipeline but declined to reveal the details.
“It is the prerogative of the government to announce the services as and when they are ready because they are the owners of the service,” he said.
“We aim to release one or two major services each year and we have several already in the pipeline. It takes about two to three years from conceptualising a service, to research and development, to actualising it.”
MyEG started its FY12 with a big jump in earnings. The company’s net profit surged 92% to RM5.4 million or 0.9 sen per share for 1QFY12 ended Sept 30 from RM2.8 million or 0.5 sen per share in the same period last year. Revenue grew 18% to RM14.2 million from RM12 million previously.
MyEG closed unchanged at 67 sen yesterday with 141,300 shares traded.
This article appeared in The Edge Financial Daily, December 16, 2011.
Tricubes recently secured a contract from the Royal Malaysian Police for the collection of and enquiries about traffic summonses.
“[Tricubes] primarily focus on click-and-pay services, which we are moving away from. The value-add for click-and-pay services is too low,” said Wong Thean Soon, MyEG managing director, after the company’s AGM yesterday.
Wong said MyEG, which provides e-service for several government departments, is shifting its focus to develop more complex services that have higher value creation, for which the company can charge a higher fee.
“Any service that involves a security document can be considered high value added,” said Wong, citing passports, MyKads, licences and permits as examples.
He noted that click-and-pay services might have very high transaction volumes but the fee is “very low”. In fact, click-and-pay services only contribute about 10% to MyEG’s profit.
To climb the value chain, MyEG is going to launch the second phase of its vehicle ownership transfer service next month. The service will allow the electronic transfer of ownership to eventual buyers, which is currently only available via Road Transport Department (RTD) counters.
Wong explained that the service is more complex than traditional click-and-pay services. It involves the transfer of road tax and registration on the RTD’s database.
Wong declined to give an earnings forecast for the new service, but he said the size of the market is roughly RM50 million a year and earnings would depend on how much of it MyEG can capture.
MyEG will charge users a RM25 convenience fee. Industry statistics indicate that there are one million car ownership transfers and one million motorcycle ownership transfers a year.
“RTD-related services contribute roughly 60% of MyEG’s revenue,” said Wong, who explained that MyEG has been providing services to the RTD for over 10 years and its products are well established. The first phase of the vehicle ownership transfer e-Government service, which MyEG is currently providing, only allows for the temporary transfer of ownership and liability to used car dealers.
Wong said the company is in talks with government departments to secure more projects. He said the company does not want to limit its services to only a few government departments.
“We aim to provide our services to all of them.”
He disclosed that there are several projects in the pipeline but declined to reveal the details.
“It is the prerogative of the government to announce the services as and when they are ready because they are the owners of the service,” he said.
“We aim to release one or two major services each year and we have several already in the pipeline. It takes about two to three years from conceptualising a service, to research and development, to actualising it.”
MyEG started its FY12 with a big jump in earnings. The company’s net profit surged 92% to RM5.4 million or 0.9 sen per share for 1QFY12 ended Sept 30 from RM2.8 million or 0.5 sen per share in the same period last year. Revenue grew 18% to RM14.2 million from RM12 million previously.
MyEG closed unchanged at 67 sen yesterday with 141,300 shares traded.
This article appeared in The Edge Financial Daily, December 16, 2011.
