KUALA LUMPUR: CIMB Research has upgraded CTOS Digital Bhd to a ‘Buy’ from ‘Hold’, citing stronger management stability, tighter cost control, and a more compelling risk-reward profile.
The research house noted that CTOS’ third-quarter performance exceeded expectations, achieving 77 per cent of its full-year earnings forecast, reflecting improved operational efficiency and profitability.
CIMB Securities also revised its financial year 2025 (FY25)-FY27 earnings forecasts for the group between 6.6 per cent and 15.9 per cent, reflecting stronger-than-
expected cost discipline following recent rationalisation exercises and higher contributions from new products and services expected to launch from the fourth quarter of 2025 (Q4 2025) onwards.
“CTOS plans to roll out new fraud prevention solutions and expand partnerships to grow its user base. In addition, the group anticipates higher associate contributions from RAM Holdings and Juris Technologies (JurisTech) in Q4 2025, driven by the deferral of orders from Q3 2025.
“Overall, CTOS remains on track for a solid earnings rebound, with core net profit projected to grow 23 per cent in FY26 and 10 per cent in FY27, marking a return to a double-digit growth trajectory,” it said in a note.
The firm also revised upwards its target price for the stock to RM1.20.
Meanwhile, Hong Leong Investment Bank Bhd said CTOS intends to continue launching new products while concurrently working with partners to expand SME out-reach to drive business flows.
Moreover, it is looking to roll out its newly revamped mobile app by the fourth quarter of 2025.
“International business is also chugging along well and we understand the take-up of higher-margin products here has been gaining traction.
“Overall, CTOS remains focused on phasing out less profitable products and optimising costs in order to restore gross profit margin back to the 70 per cent range (currently at 68 per cent),” it said.
The firm maintained a ‘Hold’ call on the stock with a higher target price of 92 sen.
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