CTOS Digital: Malaysia's Top Credit Bureau, a Potential Double Bagger
7% FCF Yield, Potential 2x Buyout Target, Insider Buying
Last week, you highlighted a potential opportunity in CTOS Digital Berhad (CTOS MK). What have you learnt since then?
I recommend shortlisting CTOS for further research.
2 reasons:
Under-recognised growth
Capital returns
Catalyst?
Within the next 5 years, the single largest shareholder will probably sell CTOS at > MYR 1.35 per share.
Interesting. Remind me again, what does CTOS do?
CTOS is the top credit bureau in Malaysia.
It buys loan repayment data and combines it with other data like bill repayment history to develop a credit score for individuals and companies.
Customers include major banks, insurers, telcos (financial institutions & corporates) as well as SMEs involved in manufacturing, professional services (commercial).
CTOS also sells credit scores directly to consumers (D2C). These are usually people who want to understand why their loan applications were rejected, or how creditworthy they appear to banks.
Finally, CTOS has a growing international segment. They specialise in alternative data credit scoring platforms in Philippines and Indonesia.
Source: CTOS (2026)
Are the shares liquid enough?
11 Aug 2026
Share price: MYR 0.69
Market capitalisation: MYR 1,570 mn (USD 383 mn)
Enterprise value (EV): MYR 1,608 mn (USD 393 mn)
Average daily volume (ADV): MYR 5 mn (USD 1 mn)
NTM P/E: 17x
Starting July 2024, CTOS’ total return started diverging from the Malaysia ETF. What happened?
Guidance downgrades.
During Q4’23 earnings, CEO Erick Hamburger targeted 2024 revenue growth from 30% to 38%. By Q3’24, this was cut to somewhere between 21% and 23%.
Actual revenue growth came in at only 17%.
Disaster.
During Q2’25 earnings, CTOS downgraded its 2025 revenue growth target. Initially, they expected 12-19% growth. But now, they expect only 3-7%.
The shares continued to slide.
The resignation of CEO Hamburger in April 20251 and CFO Chiam in September 20252 did not help.
That’s terrible. Management jumping ship! Why are you even shortlisting this company?
Wait!
It looks terrible, but it’s actually not as bad.
The board wanted a new management to re-accelerate growth. That’s the most probable reason behind the high turnover.
While CTOS explained that CEO Hamburger resigned “to explore new career opportunities”, LinkedIn shows he has not started a new role since he left.3
Under-recognised growth
What has new management done to re-accelerate growth?
The new management ramped up marketing and spending on technology.
Marketing expense was restored to ~17% of revenue, the level last reached in 2022. IT costs increased from 4% of revenue to 5% in 2025. This is the highest level since 2020.
In Q1’26, CTOS finally completed its migration to the cloud. This allows CTOS to offer more accurate, real-time predictive risk models and fraud detection.
We could see the results already.
Revenue growth accelerated to +9% in H1’26, up from just +5% the same period last year.
This was not at the expense of margins (pun very much intended!). The company maintained operating profit margin at ~+20%.
Increased spending on marketing and technology helped re-accelerate growth. That’s obvious.
The key question: how sustainable?
Leading indicators suggest revenue growth will continue improving.
In Q2’26, advance payments from customers increased +91% YoY and +43% QoQ.
Customers took around 75 days to pay their invoices, down from 90 days in Q2’25.
We talked about how when demand starts weakening, customers start delaying payments. The opposite is also true:
When demand starts recovering, customers start paying up.
Yet, the market still hasn’t fully recognised this?
Yes.
The new management targets 10-12% revenue growth over the next 2 years. Sell-side expects only 9%.
Given the leading indicators, I am inclined to believe the new management.
The valuation has not fully reflected the growth potential?
I believe so too.
At today’s share price, I estimate the company is selling at ~ 7% free cash flow yield on enterprise value (EV).
~3% premium over the Malaysia 10y government bond. This looks attractive, given that CTOS can grow revenue at high-single digit over the next few years.
In comparison, global peers like Transunion (TRU 0.00%↑ US) and Experian plc (EXPN LN) are trading at ~3% and 4% FCF yield respectively. Both show similar growth potential as CTOS.
Capital returns
What makes you think the capital returns are attractive?
In July 2026, CTOS announced it will sell 10% of JurisTech, an enterprise fintech associate. It will return the MYR 50 mn sales proceeds to shareholders through a special dividend and share buybacks.3 This is ~ 3% of today’s market capitalisation.
The company signalled further capital returns.
CTOS still has 39% stake in JurisTech. The company announced plans to eventually sell this stake. The implied valuation is MYR 195 mn, ~12% of today’s enterprise value.
Potential sale at 2x today’s share price
Creador is the single largest shareholder, with ~21% of CTOS.
The private equity (PE) firm bought the company from its founders in 2014. After bringing CTOS to IPO in 2021, it has sold its stake down to today’s level.
What makes you think it wants to sell?
There are three signs that Creador is looking to sell the entire company:
PE fund near end of life. Creador first bought a stake in CTOS in August 2014 through its second fund, Creador II.
In April 2023, Creador rolled over its stake into Creador V at MYR 1.35 per share.4
Given the 10-year standard life of a PE fund, Creador will likely want to exit within the next 5 years.
Selling at today’s share price will mean a significant loss. The best way out is probably to find a strategic buyer (maybe Experian Malaysia?) who is willing and able to pay a premium above MYR 1.35.
CTOS started selling non-core assets. In December 2025, it sold its stake in Experian Malaysia. Now, the company is selling its stake in JurisTech.
Creador’s founder became the non-executive chairman. On 1 July 2026, Brahmal Vasudevan took over as CTOS’ non-executive chairman.5
As far as I know, this is the first time Vasudevan has taken on a chairman appointment in his investees. This suggests Creador has become more serious about re-accelerating growth and restoring CTOS’ valuation.
Both pre-requisites for a profitable exit.
Very interesting. Creador bought 1,000,000 more shares in June 2026.6
I saw the new CFO started buying shares. In June 2026, he bought 50,000. Just a few days ago, on 10 August 2026, he bought another 350,000.7
Good signal.
I agree.
Chief executives in other countries, especially the UK, are required to buy and hold shares. Investors often misinterpret their buying as a bullish signal.
In CTOS’ case, this looks like bona fide buying. I am not aware that the new CFO is required to buy and hold shares.
Great. Go ahead and develop the full thesis for this.
Give me a sense of the competitive landscape. Compare CTOS to its peers like Credit Bureau Asia Limited (CBA SP) and Experian plc (EXPN LN).
Give me more details on their growth potential in Philippines and Indonesia too. It’s not material now, but what are the chances it can provide the next leg of growth?
When you model out the free cash flows, remember to use the statutory tax rate of 24%. CTOS’ tax exemption will expire in November 2026.
Coming up next
Shift4 Payments, Inc. (FOUR 0.00%↑ US).
20% p.a. revenue growth.
But only 7x P/E.
Its moat? Sticky, integrated software and payments ecosystem.
But why are so many investors betting against FOUR? Short interest is sky high at 27%!
What’s the catch?
That’s what I will explore in my next analysis.
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Published by Andrew Wong, ACA, CFA
Disclaimer
This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.
I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.
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At the time of publication, I do not hold any positions in CTOS MK, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.