【319股市】 CTOS Digital shares up after posting positive earnings
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KUALA LUMPUR (July 27): CTOS Digital Bhd shares were up in the early trade on Wednesday (July 27), after the group reported better earnings for the second quarter ended June 30, 2022 (2QFY22), bolstered by a strong performance of its core business across all three customer segments.
At 10.35am, the counter had gained three sen to RM1.34 sen, with 2.83 million units traded.
In a filing with Bursa Malaysia, the credit reporting company said its net profit surged 89.86% to RM22.48 million for 2QFY22, from RM11.84 million a year ago.
Revenue rose 22.89% to RM46.51 million from RM37.85 million for 2QFY21.
In a note on Wednesday, Hong Leong Investment Bank (HLIB) Research said it continued to like the company for its market leadership, strong economic moat and highly scalable business model.
“The pickup in economic activities is good for CTOS, given the stronger volume of credit and trade transactions.
“Also, the gradual expansion into new verticals and emergence of digital banks will help to boost revenue growth in the short to medium term,” it said.
HLIB Research said the company’s bottom line is seen to grow faster, thanks to its newly acquired 49% associate company JurisTech, along with RAM’s potential profit inclusion through equity accounting.
It added that the company’s longer-term prospects are bright, considering that the industry is under-penetrated, noting that the ASEAN credit reporting revenue per capita is some 38 to 56 times smaller than developed nations like the US and the UK.
Hence, HLIB Research has maintained its “buy” recommendation for CTOS shares, with a target price of RM1.70.