KUALA LUMPUR: Credit Suisse expects CTOS Digital Bhd (CTOS) to maintain its market dominance as it has an extensive database that is difficult to replicate, strong brand and loyal following strict regulatory requirements, and deeper pockets to build capability.
In its equity research note, it said CTOS is deemed to be a leading credit rating agency (CRA) in Asean, with a leading presence in the Malaysia (71%) and Thailand (59%) markets.
Following its bright prospects, the stockbroking firm has initiated coverage on CTOS with an “outperform” rating and a 12-month target price (TP) of RM2.50 per share, implying a potential 33.7%upside.
CTOS made its debut on Bursa Malaysia’s Main Market on July 19.
Credit Suisse said the potential catalysts that could re-rate the stock are the confirmation of its pioneer status renewal, synergistic acquisitions at reasonable valuations, and favourable data points to strengthen investors’ confidence in its growth outlook.
Another potential catalyst is the speedy restoration of its access to Malaysia’s credit bureau data following a recent temporary suspension of access due to concerns over cyber threats.
It said Malaysia’s credit reporting market size, as measured by revenue, is expected to see a 13.2% compound annual growth rate over 2021-25 and outpace the Asean region’s growth of 10.8% per annum.
The total addressable market is projected to grow at a much faster pace of 28% per annum over the same period. — Bernama