CTOS Digital

[winston]

not vested

Malaysia’s biggest IPO in 2021 said to draw Aberdeen, AIA

CTOS, backed by private equity firm Creador Capital Group, provides data and analytical tools to clients to help them manage credit risk and prevent fraud, according to Creador’s website.

KUALA LUMPUR: Malaysian credit reporting agency CTOS Digital Bhd. is in talks to sign up Aberdeen Standard Investments and AIA Group Ltd. as cornerstone investors for its planned initial public offering, according to people with knowledge of the matter.

Eastspring Investments Bhd., Fidelity International and several local asset managers are also in discussions to participate in what could be Malaysia’s biggest listing this year, the people said.

The company aims to sell shares in the Kuala Lumpur IPO for as much as 1.10 ringgit each, said the people, who asked not to be named as the process is private.

At that price, the IPO would raise about 1.2 billion ringgit ($290 million) based on its draft prospectus’ indicative offering of 1.1 billion shares.

CTOS plans to file an official prospectus before the end of the month, when it will formally confirm the cornerstone investors, the people said.

Companies have raised $84.3 million in 2021 through first-time share sales, according to data compiled by Bloomberg. The largest IPO in the year to date is real estate developer Teladan Setia Group Bhd.’s offering, which raised $24 million in February, the data show.

Source: Bloomberg

https://www.thestar.com.my/business/bus ... erdeen-aia

[winston]

not vested

CTOS Digital IPO to raise RM1.2b, including RM990m for existing shareholders

by Justin Lim

Based on the issue price of RM1.10 per share, CTOS Digital, which owns credit reporting agency CTOS Data Systems Sdn Bhd, is valued at a market capitalisation (market cap) of RM2.4 billion.

The company posted a net profit of RM37.98 million for the financial year ended Dec 31, 2020 (FY20). Based on a market cap of RM2.4 billion, Digital CTOS is being valued at 63 times of price-earnings ratio.

CTOS Digital recorded RM42.3 million revenue in the first quarter ended March 31, 2021 (1QFY21), 24.1% higher than RM34.1 million in the previous corresponding quarter, while normalised profit after tax and minority interest (PATAMI) for the quarter jumped 73% to RM16.4 million in 1QFY21 from RM9.5 million previously.

Assuming an annual net profit growth of 70% in FY21, its net profit will balloon to RM64.56 million. Based on the forward earnings, CTOS Digital will be valued at 37.2 times, should it achieve strong earnings growth.

A big chunk of the IPO proceeds, which is RM155.2 million, will be used to pare down debts, while RM59 million will be earmarked for synergistic investment and acquisition of target companies.

A total of 23 cornerstone investors participated in the institutional offering of the IPO, including renowned names such as the Employees Provident Fund Board, Permodalan Nasional Bhd, Aberdeen Standard Investment, AIA, Eastspring Investments, FIL Investment Management and JP Morgan Asset Management.

CTOS Digital group provides digital solutions across three core customer segments — the key account segment, which includes a significant number of leading financial institutions and corporates; the commercial segment, which includes a growing number of small-and-medium-sized businesses; as well as over 1.3 million individual customers who realise the importance of understanding their financial standing to better access credit.

Source: theedgemarkets.com

https://www.theedgemarkets.com/article/ ... aise-rm12b

[winston]

not vested

CTOS Digital (CTOS MK)
A Paramount In The Credit Bureau Ecosystem

CTOS is well-positioned to prosper in the ASEAN credit bureau ecosystem, riding on its
diversified customer portfolio, dominant market share with extensive database (>30
years), and ambitious regional growth strategy across multiple markets.

The large unbanked population and prospective credit growth in under-penetrated emerging countries where CTOS serves also offer plenty of opportunities for supercharged earnings growth.

Initiate coverage with BUY and target price of RM1.32.

Source: UOBKH

https://research.uobkayhian.com/content ... 20103c3c72

[winston]

not vested

CTOS Digital posts 64% jump in normalised net profit for 2QFY21

by Ahmad Naqib Idris

It said its reported net profit stood at RM11.8 million for the quarter, a year-on-year increase of 56% from RM7.5 million, while its revenue grew 23% to RM37.8 million.

Source: theedgemarkets.com

https://www.theedgemarkets.com/article/ ... fit-2qfy21

[winston]

not vested

Initiate with BUY, TP MYR2.17

CTOS Digital is the leading credit rating agency (CRA) and credit-related data solutions provider in Malaysia, with over 70% market share.

Strong organic growth potential is underpinned by new verticals, especially upside from pending launch of digital banks, while inorganic expansion is happening in parallel per the acquisition of stakes in Basis Corporation (Basis) and Business Online (BOL), notable credit rating companies in Malaysia and Thailand, respectively.

These partnerships, in our view, are synergistic to the overall group operating footprint and will facilitate accelerated expansion within ASEAN.

We initiate coverage with a BUY and MYR2.17 TP, based on a peer basket-comparable 2.6x FY22 PEG multiple.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/234400.pdf

[winston]

not vested

b]Concerns overblown
Emphasis on ‘precautionary measure’[/b]

That BNM’s temporary suspension of CRAs’ access to CCRIS is merely\precautionary in response to possible cyber-attacks is a relief and we think that the restoration of access will likely be much faster than anticipated, with minimal impact to earnings.

We maintain BUY with 2.17 TP (based on FY22 PEG target of 2.6x, in-line with global peer basket median).

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/235919.pdf

[winston]

not vested

Decent 2Q22, with strong growth momentum ahead
Maintain BUY

1H22 core earnings of MYR35m (+48% YoY) was in-line with ours and consensus’ estimates at 40%/45% of FY22E forecasts, as we expect further tax write backs in 2H22.

Core businesses remained solid, as reflected in the 23% YoY revenue growth, while associate profits were also higher following its recent acquisitions.

We remain upbeat on CTOS’ outlook as demand for credit lending solutions continues to grow.

Maintain BUY with an unchanged TP of RM1.92, based on 2.0x PEG multiple. At 35.0x FY22E PE, the stock is trading at below +1SD to its 1-year average.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/271392.pdf

[winston]

not vested

CTOS Digital shares plunge 16% to 20-month low after court decision

By Jason Ng

High Court judge Datuk Akhtar Tahir ordered CTOS Data Systems Sdn Bhd (CDS), a wholly owned unit of CTOS, to pay businesswoman Suriati Mohd Yusuf RM200,000, together with RM50,000 in costs, for an inaccurate negative credit rating.

CTOS doesn’t disclose the proportion of its revenue from its credit scoring products or credit information services, though non-credit-related streams likely make up only about 10% of total revenue, the research house added.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/704262

[winston]

not vested

4Q23: Cashing-in on overdue tax credits

Raising FY24-25E and rolling-forward valuation

Albeit buttressed by substantial tax writebacks, CTOS delivered another strong set of results on the back of solid core segment growth.

Accounting for its growing international business, we raise FY24/25E earnings by 3%/ 7% and introduce FY26E.

Rolling forward valuation, our 1.9x PEG-derived TP (from 2.0x previously; on updated regional mean PEG) is nudged higher to MYR2.10 (+7%). Maintain BUY.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/362615.pdf

[winston]

CTOS Digital (CTOS MK)
4Q23: Largely In line; Awaiting Better Catalysts

CTOS’ 4Q23 core net profit of RM28.3m is largely in line, fuelled by a yoy improvement in its Malaysia operations as momentum ramps up across all three business segments, coupled with stronger associate contributions.

While we expect CTOS to continue charting earnings growth driven by better services penetration, customer base expansion and synergies with associates, we retain our view that these have been fairly priced into its current share price and valuation.

Maintain HOLD. Target: RM1.52.

Source: UOBKH

https://research.uobkayhian.com/content ... ea1f3a3bc0