Shares in Credit Bureau Asia (CBA) have risen more than 40% since late September 2024, but this was not due to its results for 1HFY2024 ended June 30, 2024, which were released more than a month earlier, on Aug 7, 2024.
This means investors looked past CBA’s 12% higher revenue, 21% higher net profit before tax and 25% higher patmi during the six-month period.
It also means investors looked past the credit and risk information solutions provider’s interim dividend of 2 cents per share for 1HFY2024. Until the release of its FY2023 results on Feb 26, 2024, CBA had paid out dividends of 1.7 cents per share every six months since its IPO in December 2020.
Since then, CBA’s bourse filings have not been market-moving. It reported on Aug 7, 2024, that it was featured in Forbes’ “Best under a Billion list of 200 small- and mid-sized publicly-traded companies with sales under US$1 billion” — one of seven Singapore firms on the list.
On Aug 12, 2024, the company disclosed that lead independent director Chua Kee Lock, who is also CEO of Vertex Venture Holdings and independent non-executive director of Venture Corporation , had acquired 100,000 ordinary shares for $89,000 that day, up from zero shares before.
On Sept 26, 2024, the company announced a change in company secretaries. Its shares began climbing after that weekend, on Sept 30, 2024. The company again replaced its company secretary on Jan 20.
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CBA, together with its joint ventures, is currently the dominant market leader in Singapore’s financial institution (FI) data business and the sole market player in Cambodia and Myanmar, with more than 245 FI members across the three countries as of the end of 2023. CBA’s non-FI data business counts more than 6,000 enterprise customers in Singapore and Malaysia, and the company has access to a database of more than 500 million business records globally.
CGS International (CGSI) Research — the only research house with a rating on CBA — issued a positive note on Aug 13, 2024. With 1HFY2024 patmi “above expectations”, CGSI analyst Andrea Choong kept her “add” call with a higher target price of $1.30, up from $1.20 previously.
Compared to the dividend yield of 4.25% for FY2023, Choong thinks CBA will pay out more dividends when it releases its results for FY2024 in late February. She forecasts a dividend yield of 5.15% for FY2024.
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Some investors have pointed out that CBA’s shares are largely held by insiders, and they believe this means the company’s leaders have “skin in the game”.
As of March 8, 2024, Kevin Koo, the founder, executive chairman and CEO of CBA, holds 64% of the shares; executive director William Lim, meanwhile, has 6.2%. The public holds approximately 24.9% of the issued and paid-up ordinary shares of the company.
Despite not issuing a rating or target price, Gerald Wong, CEO of investment advisory platform Beansprout, issued a glowing report on CBA on Dec 29, 2024. CBA is “tapping on attractive market opportunities in the region”, Wong writes. “The expansion of products and services offerings by the digital banks in Singapore, all of which are members of CBA, also contributed to growth in its FI business.”
CBA is also targeting regional expansion. In August 2021, CBA signed a MOU with FiinGroup JSC to form a joint venture in Vietnam to provide analytics and data solutions to financial institutions, credit-granting agencies, payment services agencies and other data companies and to explore establishing a private credit bureau supporting credit granting financial and non-financial institutions in Vietnam.
In April 2023, CBA announced that it had signed an MOU with China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity Administration Bureau to explore cross-border credit bureau cooperation.
More importantly, CBA trades at a discount to global peers, says Wong, with a trailing P/E of 24.6 times.
Internationally, publicly-listed companies with a similar business model of providing credit information include US-listed Equifax and Transunion and the UK-listed Experian; these international peers trade at a P/E range of 34 to 82 times. “Given the unique and market leading position of CBA in the region, there are no directly comparable companies listed on the SGX,” says Wong.
