Brokers' take: CGS-CIMB initiates Credit Bureau Asia at 'add', S$1.53 target

Leslie Yee
Published Wed, Mar 17, 2021 · 11:19 AM

CGS-CIMB has initiated coverage on Credit Bureau Asia (CBA) at "add" with a target price of S$1.53, citing its resilient business model.

In a report dated Tuesday, analysts from the broker said CBA's value proposition lies in the need for credit information to assess counterparty risks across periods of economic growth and market uncertainty.

The analysts highlighted that CBA is Singapore's market leader by revenue in the credit and risk information solutions.

They view CBA's business model to be resilient across economic cycles, as a gauge of creditworthiness during periods of economic growth and to assess counterparty risk during cycle troughs.

For financial year ended December 2020, CBA's revenue grew 7 per cent as stronger demand for review reports from financial institutions and commercial clients offset weaker loan applications volumes.

The analysts see high barriers of entry in the credit risk and information space. They note CBA's subsidiary Credit Bureau (Singapore) Pte Ltd has an entrenched position in Singapore with its 18 years of history in the industry. Parties that wish to conduct a lending business are required by the Monetary Authority of Singapore to make enquiries with a credit bureau prior to commencing operations.


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In Cambodia and Myanmar, the analysts highlighted that the joint ventures of CBA are the sole credit bureaus, allowing for first-mover advantages.

The analysts like CBA's highly cash generative business, with minimal capital expenditure. They are projecting growth in earnings before interest, tax, depreciation and amortisation of between 8 per cent and 18 per cent over the next three financial years.

The counter closed at S$1.34, after rising  6.35 per cent on Wednesday.

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