FAQs

Malaysia is our home market; it is where our business is founded and headquartered. We have a strong track record and large datasets, having accumulated over 30 years of industry data since our establishment in 1990.  The market has significant upside for growth given the increased emphasis on digitization.  

The proceeds of the listing will be used to continue our growth strategy. We intend to continue investing in the development of our ecosystem of end-to-end credit management solutions, and deepen and broaden our data sources. This includes expanding into new verticles such as the automotive, real estate and insurance sectors.

The listing here in Malaysia allows Malaysian companies and individuals to invest in a homegrown Malaysian company operating in an industry that has a strong potential for accelerated growth.  There are limited opportunities in Malaysia to invest in fintech companies, and the interest is definitely there, as evidenced by the local and regional institutional interest this IPO has attracted. 

This is a Reg S transaction. It can be offered and sold to US investors.

This would be determined by the market as we go through the price discovery process which includes engagement with the syndicates’ research analysts and key potential investors.

50%

Yes. An application was made to the SC’s Shariah Advisory Council and has been approved.

We target a dividend payout ratio of at least 60% of our PATAMI attributable to the owners of our Company.

According to the independent market research (“IMR”) report by IDC Market Research (“IDC”), we have a market share of 71.2% (including Basis), in terms of revenue in 2020.

We were impacted in the short-term in May 2020 by the effects of the Movement Control Order (“MCO”) on our customers’ operations, though our business has rebounded strongly since June 2020.

Our revenue in 2020 remained resilient despite the MCO in Malaysia as this was driven by growing demand for our digital solutions.

Our revenue has grown steadily by 27.2% over the past two years from RM110.5 million in FY2018 to RM140.5 million in FY2020 while net profit attributable to owners of the company increased 32.1% over the same period.

We also sustained our gross profit margin as it ranges from 83.3 – 86.4% while PATAMI margin ranges from 26.8 – 30.2%.

FINANCIAL AND OPERATIONAL HIGHLIGHTS
The following table sets out information derived from our consolidated statements of comprehensive income for the financial years indicated.

Notes:

1. Computed based on GP divided by revenue.
2. Computed based on PBT divided by revenue.
3. Our subsidiary, CTOS Data Systems, the main contributor to our Group’s income, is entitled to pioneer status incentives under the PIA 1986 for MSC Malaysia Qualifying Activities. As a result, our effective tax rate has been significantly lower than the statutory tax rate of 24.0% in Malaysia. The tax relief period under CTOS Data Systems’ MSC Pioneer Certificate is from 9 November 2016 to 8 November 2021. However, pursuant to the Grandfathering and Transitional Guidelines which became effective on 1 January 2019, such tax relief period will be until 30 June 2021. For more information, see Section 12.2.2 of this Prospectus and Note 2.9 of the Accountants’ Report in Section 13 of this Prospectus.
4. Computed based on PATAMI divided by revenue.
5. Computed based on current assets divided by current liabilities as at the end of the financial year.
6. Computed based on total borrowings divided by total equity as at the end of the financial year.

Apart from a high projected Industry CAGR growth, as compared to the US, Malaysia’s credit reporting revenue per capita is 12 times smaller at RM6.86 per capita.

Malaysia’s percentage of population covered by Credit Bureau stood at 77% in 2019, lower than the 100% recorded in the US. This presents us with a visible growth upside.

We aim to maintain our clear market share leadership in Malaysia.

Growth strategies include growing revenue from Key through our new digital products and solutions.

We also intend to increase consumer awareness campaigns to increase our market penetration within the consumer segment.

We may also look to selectively pursue acquisitions and investments as part of our growth strategy.

We foresee additional growth opportunities for us in the Asia Pacific region and we are actively seeking opportunities to expand both in Malaysia and in ASEAN.

We typically seek assets that have direct cost and capability synergies with our solutions.

We primarily seek acquisitions with products and solutions that complement ours, as well as businesses with significant growth potential.

The ASEAN Credit Reporting Industry is expected to grow at a CAGR of 10.8% from 2021E-2025E, higher than the US (7.5%) and the UK (5.3%). This makes ASEAN markets an attractive market to grow our business.

We intend to remain prudent on leverage and maintain a healthy and sustainable capital structure balanced with business growth, both organically and inorganically.

the next two years, we expect to invest in two main areas, i.e. innovative products including analytics as well as data and infrastructure security

We expect to allocate approximately 50.0% of our capital expenditures into upgrading our IT capabilities and approximately 15.0% of our capital expenditure into data and analytics using our internally generated funds.

Behaviour of consumers across the world is changing and the shifts to online for spending and other services have only been accelerated by the COVID-19 pandemic of 2020. New technologies will play a huge role in driving credit reporting growth. This shift will increase the need for real-time credit decisioning in digital ecosystems, creating significant opportunities for a CRA which can scale and connect the credit ecosystem to multiple industries from new data sets on customers.

According to IDC’s IMR, the credit reporting industry market size in Malaysia stood at RM216.9 million in 2020 and is expected to continue to grow at a CAGR of 13.2% between 2021 and 2025 in terms of revenue. Despite a slowdown in growth in 2020 (4.3%) vs 2019 (9.5%), recovery to higher levels of growth in 2021 at 9.7% is expected, based on increasing consumer confidence and lending. In the last 10 years, there has only been one new entrant into the industry.

The credit reporting industry market size is also expected to grow rapidly in the ASEAN markets at 10.8% between 2021 and 2025.

CTOS Digital which offers a digital end-to-end portfolio is in a good position to capture future growth of the changing CRA landscape.