Zetrix AI Shares Drop to One-Month Low After Government Ends Foreign Worker Permit Renewal Contract
Zetrix AI Bhd’s shares declined sharply to their lowest level in a month following the government’s decision to terminate its contract for handling foreign worker permit renewals. The stock fell as much as 11 sen, or 12.09%, hitting an intraday low of 80 sen before closing at 83.5 sen, down 8.24%. This put Zetrix AI’s market capitalisation at RM6.46 billion.
Trading activity surged, with volume reaching 256.14 million shares — over three times the 20-day average — making it the most actively traded stock on Bursa Malaysia that day.
Government’s Contract Decision and Background
A recent Public Accounts Committee (PAC) report confirmed the government’s move to end Zetrix AI’s involvement in foreign worker permit renewals. This followed the finalisation of a six-year contract with Bestinet Sdn Bhd to implement the Foreign Workers Centralised Management System (FWCMS).
According to Dr Hebat Hisham Mohd Yusoff, deputy divisional secretary of the immigration affairs division, the contract with Zetrix AI was a one-plus-one-year arrangement rather than a fixed two-year term. This structure gave the government flexibility to opt out of renewal.
Market and Analyst Perspective
Despite the share price drop, market analysts remain confident about Zetrix AI’s long-term prospects. Martin Foo from MBSB Research pointed out that foreign worker permit renewals contribute minimally to Zetrix AI’s overall revenue. The company’s future growth is expected to be driven primarily by developments in blockchain and artificial intelligence (AI).
Foo maintained a "buy" recommendation on the stock with a target price of RM1.25, emphasizing that the fundamentals of Zetrix AI remain solid despite the contract termination.
Contract History and Extensions
Zetrix AI, formerly MyEG Services Bhd, initially secured a three-year concession for immigration-related services due to expire in May 2023. The company later received confirmation from the Home Ministry and Ministry of Finance for an extension, which was formally approved for two years on October 16, 2023.
This recent contract termination marks a significant change in Zetrix AI’s role but does not appear to disrupt its broader business strategy.
Implications for Government and Related Sectors
This development signals the government's shift towards centralised digital management systems for foreign worker permits, potentially improving operational efficiency. For those working in government roles related to immigration and workforce management, staying informed of such changes is crucial.
To enhance skills in AI and related technologies that are increasingly influencing government operations, consider exploring practical courses available at Complete AI Training.
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