Malaysia’s digital economy gaining traction – Maybank IB
15 Jun 2021
Malaysia’s digital economy is gaining traction, driven by smartphone access, internet connectivity, market readiness towards ride-hailing and food delivery app services, the drastic shift towards e-commerce and companies integrating technology in their core business.
In a note today, Maybank IB Research (Maybank IB) said according to Bank Negara Malaysia, the value and volume of digital payments have grown steadily to RM23 billion and RM302 million, respectively, as of April 2021.
The research house said the growing number of e-wallet companies like Touch ‘n Go (TNG), Boost and Grab, has resulted in a very competitive space, with highly sensitive pricing to maximise Monthly Active Users (MAU) likely resulting in “survival of the fittest”.
Meanwhile, competitive dynamics look better among the merchant acquirers (provider of payment terminals and transaction processors), with the major ones being GHL Systems (GHL), Revenue Group Bhd (RGB) and the banks, it said.
“We see stronger catalyst from faster-than-expected merchant recruitment vis-a-vis Transaction Processed Value growth, retail expenditure and tourism recovery, stronger regional expansion efforts and visibility from Value-Added Services segment contribution for the merchant acquirers.
“However, given full valuations, we are neutral on the sector for now, with ‘hold’ ratings for both GHL and RGB,” Maybank IB said. It noted that GHL and RGB have limited exposure to the thriving e-commerce, ride-hailing, food delivery and other online services merchants who stand to gain most from the brick-and-mortar retail expenditure hurdles due to the Movement Control Order 3.0.