Kenanga Research said the outlook across CTOS’ key markets remains resilient.
PETALING JAYA: CTOS Digital Bhd
is likely to see a soft first quarter (1Q25) due to slower corporate and consumer activity during the period, analysts say.
However, Kenanga Research expects its earnings to recover as business momentum picks up from 2Q25 onwards.
The research house said said the credit reporting agency’s 1Q25 results, expected to be reported on April 25, will likely be weighed down by a confluence of seasonal factors – an early Chinese New Year, school holidays, and the fasting month – which slowed both corporate and consumer activity.
“However, management has maintained its full-year guidance for this year, implying a rebound in business momentum from 2Q25,” the research house said in a report.
It sees this year as a period of growth for CTOS, underpinned by rising demand for digital financial services, increasing credit participation, and institutional demand for risk analytics.
According to the research house, CTOS’s strategic pivot towards enhancing average revenue per user via artificial intelligence-powered offerings and cross-selling initiatives remains underappreciated.
“A 1Q25 earnings miss – if any – should be seen as a tactical buying window,” the research house said.
On the macro front, Kenanga Research said the outlook across CTOS’ key markets remains resilient, “with gross domestic product (GDP) and business-activity forecasts staying in expansionary territory”.
CTOS primarily operates in Malaysia, but has expanded its footprint into Thailand and the Philippines, and more recently Indonesia, through acquisitions.
“The structural demand for credit – and thus credit data – continues to rise, underpinned by digital financial inclusion and resilient domestic consumption which is the primary driver to each country’s GDP,” the research house said.
“The United States is not a major trading partner for the countries CTOS operates in, rendering any ‘Trump risk’ largely a red herring for this narrative.”
Nonetheless, it flagged potential headwinds from revived policy volatility in the United States.
“President Donald Trump has reignited policy volatility, fuelling market uncertainty and investor angst. We have trimmed our GDP forecast for Malaysia this year to 4.4% (from 4.7%) due to these disturbances, but the cut is too minor to derail CTOS’ trajectory,” it said
Kenanga Research has kept its “buy” call on CTOS with a target price of RM1.33 per share, noting that the stock trades at a discount to global peers despite offering better forward return on equity and structural growth levers.
“Investors overly focused on 1Q25 risk missing the forest for the trees,” it said.
“With management maintaining full-year guidance and macro tailwinds firming up, we see room for expansion.”
