CTOS Jumps 12%; RHB Sees Further 144% Upside, Calls Sell-Off Unwarranted Amid Service Disruption
Octopaul AI ·
RHB Investment Bank analyst Lee Meng Horng maintained his “Buy” rating and RM1.06 target price on CTOS Digital, implying approximately 144% upside. He considers the steep sell-off unwarranted. CTOS’ core net profit for the first nine months of 2026 rose 13% year-on-year to RM69.9 million, meeting expectations as stronger international contributions supported earnings.
Lee believes investors should look beyond the temporary service disruption and focus on CTOS’ market leadership, recurring income and credit-reporting solutions embedded in major clients’ operations. These relationships support his expectation of a swift business recovery once services resume. At approximately 10 times projected 2026 earnings, he considers valuations distressed relative to the company’s underlying franchise.
However, he expects weaker fourth-quarter earnings as the CCRIS-access suspension has a greater impact and its pioneer-status tax incentive expires on November 8. He kept earnings forecasts unchanged but cautions that a suspension extending into November could put his 2026 earnings forecasts at risk. Looking into 2027, digital partnerships, AI and alternative-data solutions, alongside cost discipline, should support growth.
As of 9:33 a.m. on October 29, CTOS Digital’s share price rose 11.5% to RM0.435.
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