KUALA LUMPUR: Credit reporting agency CTOS Digital Bhd (CTOS) made a strong debut on the Main Market of Bursa Malaysia, with its share price surging to a high of 1.76 sen from its initial public offering (IPO) price of RM1.10.
The counter opened at RM1.50 or 40 sen above its IPO price, registering a 36% premium.
Thus far, this is the largest IPO in the country this year that has raised RM1.2bil, of which RM220mil was by issue of new shares at IPO price.
During the virtual listing ceremony, CTOS group chief executive officer Dennis Martin said the agency has been pleased by the overwhelming support from both institutional and retail investors.
CTOS recorded the largest number of institutional investors participating in a Malaysian IPO, with 23 renowned cornerstone investors on-board.
Meanwhile, Martin noted that the retail tranche also garnered the largest retail demand for an IPO since 2013, attracting RM1.38bil worth of applications with 27.6 times oversubscription rate from the retail public.
“The tremendous support received motivates us to extend our resilient performance even further. We reported strong double-digit growth rates in the most recent quarter and first half of the year, which indicates our positive growth trajectory in the credit reporting industry,” he said.
CTOS' net profit jumped 56% to RM11.84mil for the second quarter ended June 30, 2021 from RM7.5mil a year ago.
For the six months ended June 30, 2021, the agency recorded a higher net profit of RM19.53mil from RM15.62mil a year ago.
Revenue for that period increased to RM75.80mil, as compared to RM64.73mil in the corresponding a year ago, with a strong contribution from Malaysian and international operations.
Moving forward, Martin said CTOS would continue to expand its product offerings and customer reach organically and through acquisitions in the Asean region.
He added that the group would remain committed in balancing sustainable growth and rewarding its shareholders while growing its track record.
“Our dividend policy of 60% profit after tax after minority interest showcases this pledge,” said Dennis.
CTOS declared a first interim single-tier dividend of 0.53 sen per share for financial year ending Dec 31, 2021 (FY21), which would be paid on Sept 3, 2021.
At close yesterday, the share price climbed 52 sen to RM1.62.
Meanwhile, Kenanga Research said CTOS is poised to benefit from a growing customer base as well as expansion of product offerings in an underpenetrated market.
“We also like its resilient business model and future plans to tap into new sectors with tremendous growth potential.
“With its market leader status, more robust industry growth, superior earnings growth and scarcity premium for Asean-listed credit reporting agency, it deserves a greater valuation premium,” Kenanga said in its report initiating coverage on the stock.
CTOS targets to expand into new sectors such as automotive, insurance and real estate.