PETALING JAYA: My EG Services Bhd’s (MyEG) expansion in health-tech services bodes well for the company’s bottom line in the long run.

       The company will be pioneering the introduction of a rapid breath test system for the screening of the Covid-19 virus in the country.

       As it is, MIDF Research is already positive on MyEG’s long-term business prospects owing to the growth in e-government transaction volume and its expansion in concession-related business.

       “Apart from its online road transport services, we also opine that its health-tech services, blockchain initiatives as well as global presence and partnership are likely to leave a positive impact on the group’s contribution soon,” the research house said.

       MyEG recently expanded its health-tech services with Breathonix Pte Ltd to deploy Breathonix’s BreFence Go Covid-19 Breath Test System.

       Under the agreement, the company was appointed as the exclusive distributor for all market segments in Malaysia for the marketing, sale and distribution of the contractual products in relation to BreFence.

       The agreement commenced on Dec 22, 2021 and will run for a period of three years with automatic yearly renewal for a one-year term after the initial term and subsequent terms.

       The Covid-19 breathalyser will be an alternative screening method at the country’s entry points such as at the international airports.

       Given BreFence Go’s competitive price and quick-test result, MIDF Research is of the view that the Covid-19 breathalyser is relevant to be used among travellers and implemented at locations with high traffic volume such as shopping malls and immigration points.

       The research house said management has guided that BreFence Go will cost RM100 per test, which is cheaper compared to the usual cost of RT-PCR/Rapid RT-PCR tests of RM200 to RM400.

       Given the latest development, MIDF Research said it has raised its revenue and earnings forecast for financial year 2022/2023 (FY22/FY23) by between 5.2% and 11.1%.

       It also rolled forward its valuation base year to FY22 and derived a revised target price of RM1.27 a share from RM1.20 previously.

       This, it said, is premised on pegging FY22 revised earnings per share of 6.1 sen.

       MIDF Research has maintained a “buy’’ call on the stock.