INITIATION

Company Note Financial Services - Others │ Singapore │ March 16, 2021

Insert Insert Singapore Credit Bureau Asia Ltd ADD

Consensus ratings*: Buy 0 Hold 0 Sell 0 Resilient through peaks and troughs

Current price: S$1.26 ■ CBA’s value proposition lies in the need for credit information to assess Target price: S$1.53 counterparty risks across periods of economic growth and market uncertainty. Previous target: N/A ■ Its resilient business model held revenues steady through Covid-19, rising Up/downside: 21.2% 7% yoy in FY20 as bulk risk reviews offset weaker credit application volumes. CGS-CIMB / Consensus: na ■ We initiate coverage on CBA with a TP of S$1.53. The commencement of the Reuters: TCU.SI commercial credit info business under its FI Data Business is a key catalyst. Bloomberg: CBA SP Market cap: US$215.7m S$290.3m Dominant market position in Singapore; resilient business model Average daily turnover: US$1.48m Credit Bureau Asia Limited (CBA) is Singapore’s market leader (by revenue) in the credit S$1.96m and risk information solutions (CRIS) space. We view CBA’s business model to be Current shares o/s: 203.5m resilient across economic cycles – as a gauge of creditworthiness during periods of Free float: 24.7% economic growth and to assess counterparty risk during cycle troughs. The defensive *Source: Bloomberg nature of CBA’s operations boosted revenues by +7% yoy in FY20 as stronger demand for review reports from financial institutions and commercial clients offset weaker loan

applications volumes. We expect the risk review volumes to sustain as business

sentiment recovers, underpinning EPS growth expectations of 8-28% yoy in FY21-22F.

Price Close Relative to FSSTI (RHS) High barriers of entry; first-mover in Cambodia and Myanmar 1.60 164.0 CBA’s entrenched position in Singapore – through its subsidiary Credit Bureau 1.40 146.5 (Singapore) Pte Ltd (CBS) – is underpinned by a favourable regulatory environment in 1.20 129.0 Singapore. Institutions wishing to conduct a lending business are required by the 1.00 111.5

0.80 94.0 Monetary Authority of Singapore (MAS) to make enquiries with a credit bureau prior to 15 10 commencing operations. Barriers of entry into the CRIS industry are high, given CBS’s

5 history in the industry (c.18 years), cementing its headway in data collection far beyond a Vol m Vol Dec-20 Dec-20 Jan-21 Feb-21 new player’s reach. At present, the joint ventures (JVs) of CBA are the sole credit

Source: Bloomberg bureaus in Cambodia and Myanmar, allowing for first-mover advantages.

Price performance 1M 3M 12M Highly cash generative; minimal capex requirements Absolute (%) -11.9 28.6 CBA is highly cash generative (S$20.6m in operation cashflow in FY20) given its Relative (%) -17.7 20.5 business model of aggregating and repackaging credit information into useable reports

Major shareholders % held and data packets for sale. Capex requirements are minimal and are mainly for upgrading Koo Chiang 67.8 technology infrastructure. We believe that CBA’s operating cashflow will be more than Lim Wah Liang 7.5 sufficient to cover future development capex (c.S$4m in FY21F, normalising to c.S$1.5m Standard Life Aberdeen PLC 2.4 thereafter), sustaining its net cash position. Insert Solid growth ahead on progressive economic recovery We forecast EBITDA to grow c. 8-18% in FY21-23F as elevated levels of portfolio monitoring requests offset support revenue growth as credit demand recovers. We initiate coverage on CBA with a TP of S$1.53 based on DCF methodology (LT growth: 1.2%, WACC: 7.0%, risk-free rate: 1.5%, beta: 0.9). The commencement of its commercial credit bureau business (FI Data Business) and start-up of four digital banks in Singapore are key catalysts. Technological security breaches are a key downside risk for CBA.

Analyst(s) Financial Summary Dec-19A Dec-20A Dec-21F Dec-22F Dec-23F Revenue (S$m) 40.62 43.38 48.27 52.71 57.13 Operating EBITDA (S$m) 22.11 24.06 27.96 30.02 32.26 Net Profit (S$m) 7.38 8.20 9.53 10.36 11.22 Core EPS (S$) 0.035 0.035 0.047 0.051 0.055 Core EPS Growth (1.7%) 35.6% 8.7% 8.3% FD Core P/E (x) 36.29 26.90 24.76 22.85 DPS (S$) 0.036 0.036 0.042 0.046 0.050 Andrea CHOONG Dividend Yield 2.88% 2.88% 3.35% 3.64% 3.94% T (65) 6210 8672 EV/EBITDA (x) 10.51 9.03 7.84 7.34 6.85 P/FCFE (x) 11.69 13.95 12.37 11.00 E [email protected] Net Gearing (120%) (92%) (88%) (85%) (83%) Darren ONG P/BV (x) 16.12 5.88 5.75 5.62 5.49 T (65) 6210 8671 ROE 23.7% 21.6% 23.0% 24.3% E [email protected] % Change In Core EPS Estimates CGS-CIMB/Consensus EPS (x)

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. IF THIS REPORT IS DISTRIBUTED IN Powered by the THE UNITED STATES IT IS DISTRIBUTED BY CGS-CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH. EFA Platform

Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

INVESTMENT THESIS Defensive business model through peaks and troughs of economic cycles We view CBA’s business model as resilient across the different phases of the economic cycle – through periods of credit expansion and recessionary troughs. CBA’s operations depend greatly on the demand for credit information reports required by both financial institutions (FI) and non-financial institutions (non-FI) in assessing counterparty credit risk (whether for the extension of loans and credit lines, supply chain management, or for credit quality assessments), whereby GDP growth rates can be indicative of revenue growth in rising cycles. Counterintuitively, the demand for credit information remains inelastic through economic downtrends given the value of continuously assessing creditors’ abilities to service debt obligations. Apart from one-off reports for loan applications, pre-employment checks and pre-screening of business partners, CBA offers customised monitoring services for higher-risk exposures, which provide sustained revenue streams despite the limited credit growth in the system – as exhibited in FY20 through the Covid-19 pandemic.

Earnings momentum held steady through the height of global border closures; revenues rose 7% yoy to S$43.4m in FY20. This was driven by elevated demand for risk management reviews globally, which offset the lower volume of new loan applications. Covid-19 disruptions had necessitated government intervention globally and these measures included wage support schemes, loan and insurance moratoriums as well as loan restructuring directives – all of which would expire over the coming year. In our view, CBA is well-placed to be a defensive play in both a prolonged business downturn and the eventual economic recovery given the essential nature of credit and risk information. We forecast revenue growth of c.8-11% over FY21-23F (FY17-20: c.4-9%) as compounded by the addition of new bureau members (4 digital bank licences awarded in Dec 20, onboarding of members in Myanmar), strong economic recovery and the rising emphasis on CRIS.

Strong cash generation; asset-light operating model CBA has a strong balance sheet, maintaining its net cash position. Its capex needs are largely confined to the upgrading of IT, digital, compliance, and cybersecurity infrastructure, given the asset-light nature of its operations. This includes costs to upgrade its computer software every 3-5 years (we expect c.S$4m in FY21F, normalising to c.S$1.5m thereafter). We expect CBA’s net cash position to continue to strengthen in FY20-22F, given its strong free cash flow generation, and believe that this will be more than sufficient to cover its future development capex. CBA recorded operating cashflow of S$20.6m in FY20; we expect this to rise towards S$28.8m in FY23F on the back of improving business momentum.

Market leader in Singapore; first-mover and sole credit bureau in Cambodia and Myanmar In Singapore, MAS requires financial institutions (FIs) to make enquiries with a credit reporting bureau prior to the commencement of lending operations. CBS’s long-operating track record allows for the breadth of credit history required for systemic default analysis across business cycles. It is the leading credit bureau in Singapore with a 99.9% market share of the FI Data Business (by revenue) in 2019. We estimate that CBS’s closest FI Data Business competitor, Experian (NR, Closing price: GBP2,431), has limited scope in organically garnering significant market share, given its limited membership base of four banks

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

currently, giving rise to significant switching costs. MAS’s requirements for FIs in Singapore to conduct pre-employment credit health screenings to ensure financial soundness in its staff force, as well as the Casino Regulatory Authority’s similar prerogative to conduct these checks in Singapore, further strengthens CBS’s stronghold in the market. In the Non-FI Data Business, Frost & Sullivan (F&S) reported that, for 2018, Dun & Bradstreet (Singapore) Pte. Ltd. (D&B Singapore) — CBA’s JV with Dun & Bradstreet (D&B) — held 40% of the market share (by revenue) of the Non-FI Data Business, a close second behind Experian’s 57%.

Figure 1 FI Data Business market share in 2019 (by revenue) Figure 2: Non-FI Data Business market share in 2019 (by revenue)

Others, 0.1% Others, 3%

D&B Singapore, 40% CBS, 99.9% Experian, 57%

SOURCES: CGS-CIMB RESEARCH, FROST & SULLIVAN SOURCES: CGS-CIMB RESEARCH, FROST & SULLIVAN

Credit Bureau (Cambodia) Co., Ltd (CBC), an indirect JV (CBA holds a c.49% stake in Equifax Cambodia Holdings Pte. Ltd (Unlisted), which in turn holds a c.49% stake in CBC) of CBA, currently operates as Cambodia’s sole market player in the FI Data Business – giving CBA a first-mover advantage in this space. Myanmar Credit Bureau Limited (MMCB) commenced operations in the fourth quarter of 2020 as Myanmar’s first and sole credit bureau in the FI Data Business space. The credit bureau licences in both countries are non-exclusive, but we believe that CBA’s experience in offering credit and risk information solutions is likely to provide it sufficient operating runway ahead of potential incoming competitors. CBA estimates Myanmar operations to break even in 18- 24 months from Dec 2020

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

Latent population growth and unbanked population to drive credit demand Credit demand is driven by a combination of the interest rate environment, intra- regional trade agreements, unemployment and inflation rates and, to an extent, relative development levels and urbanisation of an economy. To this end, the recent cut of the Federal Reserve rates to the 0-0.25% range by the United States Federal Reserve in Mar 2020 provides a conducive environment to leverage cheaper lending rates across the region, spurring credit growth.

CBA’s home market in Singapore offers income stability for CBS, given its leading market position. Notwithstanding the city state’s lower population growth rate at 0.6% (CAGR over FY19-24F as per F&S), the modest growth is offset by elevated income levels (c.S$82.7k GDP per capita in FY19), allowing for greater disposable income and stronger purchasing power.

Figure 3: Population growth is likely to remain a strong driver of Figure 4: Increasing urbanisation rates (and financial credit growth, particularly in Cambodia and Malaysia sophistication) across CBA’s key markets will in turn lift the demand for CRIS services

CAGR 120% 60.0 +0.7% 100.0%100.0% 100% 50.0

CAGR 76.6% 79.2% +1.3% 80% 40.0

60% 30.0 CAGR +1.4% 40%

20.0 30.9% 32.5% Population(million) Urbanisation Rates(%) Urbanisation 23.8% 26.0% CAGR +0.8% 20% 10.0

0% 0.0 Singapore Cambodia Malaysia Myanmar Singapore Cambodia Malaysia Myanmar

2019 2024F 2019 2024F

SOURCES: CGS-CIMB RESEARCH, UNITED NATIONS SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

Meanwhile, the large unbanked (and under-banked) population and relatively fast macro-economic growth, combined with advancement of domestic financial markets and banking systems in Cambodia, Myanmar, and to a lesser extent, in Malaysia, provide growth opportunities for credit and risk information solutions. According to the Global Findex Database by the World Bank, only 22% of adults in Cambodia had a bank (or other FI) account — a stark contrast to the c.98% in Singapore (as of 2017). Malaysia and Myanmar had bank account penetration rates of 85% and 26%, respectively, as of 2017. We expect the progressive urbanisation of these regional economies is expected to lead to an increased uptake of financial products beyond current accounts and savings accounts, thereby boosting credit growth.

Larger marketplace as digital banks come onstream We expect CBA to directly benefit from the issuance of four new digital banking licences in Singapore at end-2020. Apart from expanding the marketplace of both suppliers and customers for CBA upon the commencement of operations in 2022 (as per the Monetary Authority of Singapore’s guidelines), we believe that the eventual regional expansion of these digital banks will offer significant financial inclusion benefits in regional economies (namely, Cambodia and Myanmar spurring a quicker pace of credit growth in these markets given the asset-light operating model of digital banks. We expect the National Bank of

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

Cambodia’s (NBC) blockchain-based P2P platform (Project Bakong: announced on 22 Jul 2019 by NBC) to similarly promote financial inclusion, supporting the growth of CRIS.

Higher barriers of entry from implementation of Credit Bureau Act in Singapore In Singapore, the FI Data Business is currently confined to consumer credit data. When the Credit Bureau Act comes into force (the effective date is yet to be announced), any person who desires to carry out a consumer or corporate credit reporting business must apply to MAS for a licence. Pursuant to the upcoming commencement of the Credit Bureau Act, management guides that CBA’s subsidiary CBS is making preparations to apply for a commercial credit bureau licence, in addition to the planned application for a licence for its existing consumer credit reporting business. A liberalisation of this limitation in Singapore is a potential catalyst for CBA, in our view. In Cambodia and Myanmar, the FI Data Business comprises both consumer and commercial credit data.

COMPANY BACKGROUND CBA is a leading CRIS player in Singapore. CBS aggregates credit information from FIs, commercial entities and public sources, and repackages such information into credit reports and data packets for resale back to FIs and commercial customers, as well as individuals. The credit profiles obtained are then used to assess counterparty risks and the financial health status of potential borrowers, suppliers and employees for regulatory checks, as well as for other customer due diligence purposes.

Figure 5: CBA is headquartered in Singapore. Its regional operations span Malaysia, Cambodia, and Myanmar

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

FI Data Business CBA has established credit bureaus in Singapore, Cambodia, and Myanmar through JVs with local and international partners. CBA operates its FI Data Business in Singapore through CBS, which was founded in Singapore in 1995. CBA then expanded its operations into Malaysia (via Credit Bureau Malaysia Sdn. Bhd. The sale of its stake was completed in Jun 2020), Cambodia (via CBC) in 2012 and, most recently, Myanmar (via MMCB) in 2020.

Non-FI Data Business CBA has a long-standing JV with D&B via D&B Singapore. D&B Singapore has been offering commercial credit information services (Non-FI Data Business) in Singapore and Malaysia since 2000. In Singapore, the CRIS services are offered mainly through the Singapore Commercial Credit Bureau (SCCB) and Global Credit Risk Management Services (GCRMS) platforms, all of which are operated through D&B Singapore. In Malaysia, CRIS services are provided by D&B Malaysia Sdn Bhd (D&B Malaysia). CBA (excluding CBC and MMCB) had a total of 170 full-time staff as at end-Jun 20.

Figure 6: History and milestones Year Milestones 1995 SG: First established business of collecting and distributing credit information SG: Commenced (i) consumer and commercial receivables management services, and (ii) online consumer and commercial credit bureau services 1997 MY: Established a business of collecting and distributing credit information 2000 SG: Established Infocredit Holdings Pte Ltd through a JV with ABI, established D&B Singapore and D&B Malaysia through a JV with D&B 2002 SG: Established CBS and recognised as a Credit Bureau under the Banking Act 2005 SG: Established Singapore Commercial Credit Bureau platform 2018 MY: Established CBM through a JV with DBM, Credit Guarantee Malaysia (CGC) and Association of Banks (ABS) in Malaysia Cambodia: Established CBC through a JV with Equifax, the Association of banks in Cambodia, the Cambodian Microfinance Association and the CBC 2011-2012 Cambodian banks. CBC began operations in Mar 2012 2016 Myanmar: Established MMCB through a JV with Myanmar bank association 2017 SG: Established Telco Credit Bureau Singapore to aggregate and sell default data to the three major telecommunication providers 2018 Myanmar: MMCB's operating license issued in May 2018 SG: Internal restructuring - established CBA as the holding company of the group 2019 Cambodia: CBC commenced sale of commercial credit reports SG: Expected acquisition of CBA Data Solutions MY: Completion of sale of CBM 2020 Myanmar: MMCB's operations commenced on 30 Dec 2020 SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

BUSINESS OPERATIONS CBA’s business can broadly be categorised into two segments: FI Data Business and Non-FI Data Business. Revenue contribution from the Non-FI Data Business has gradually expanded over the past few years, accounting for 59% of total revenue in FY20.

Figure 7: CBA’s Non-FI Data Business is its key driver of Figure 8: CBA’s operations in Singapore contributed the bulk of revenue growth, accounting for 59% of total revenue in FY20 PBT in FY19 as Malaysia remained loss-making prior to disposal of CBM in June 2020

44% 95% 50 25 45 43.4 20.8 40.6 19.0 20 2% 40 37.4 6% 6% 35.7 35 14.1 15 12.7 30 7% 8% 59% 58% 58%

25 56% 10 S$'m 20 S$'m 99% 98% 93% 15 5 95% 10 44% 42% 42% 41% - 5 -3% -6% -4% -1% -1% FY17 FY18 FY19 FY20 - FY17 FY18 FY19 FY20 (5)

FI Data Business Non-FI Data Business Singapore Cambodia Malaysia Myanmar

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

FI Data Business The FI Data Business includes activities of CBS, CBC, and MMCB. Its main operations comprise the sale of credit reports to FIs to assess the creditworthiness of potential borrowers, as well as for the monitoring of credit risk of existing lending portfolios. CBA’s FI Data Business in Singapore (operated through CBS) is underpinned by CBS’s significant 18-year credit history bank and bureau member base of 31 FIs (vs. Experian’s four members) (as of 2020). Consequently, CBS is Singapore’s only comprehensive consumer credit bureau with full industry uploads from its members, comprising all retail banks and major FIs in Singapore. In late-2020, CBS was awarded a tender by the Ministry of Law to develop, establish, and operate the Moneylenders Credit Bureau in Singapore. Regionally, CBC and MMCB respectively operate the sole credit bureaus in Cambodia and Myanmar. Other revenue from the FI Data Business stems from data analytics and debt consolidation reports.

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

Figure 9: FI Data Business operational flow chart

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

Key customers comprise both bank and non-bank FIs, who subscribe as members of their respective credit bureaus. Of note, only banks, credit providers and finance companies are eligible to be members of CBS due to MAS’s regulations. On the other hand, members of CBC and MMCB include microfinance, leasing companies and rural credit institutions as well. As at end- Jun 20, CBA’s FI Data Business in Singapore comprised 31 members, including banks such as DBS Bank Ltd and Citibank Singapore Ltd, credit providers such as American Express International Inc., as well as finance companies such as Hong Leong Finance Ltd. In Cambodia, CBC serves 165 participating members. Aside from outstanding credit facilities in the market, CBA offers rating systems for consumer and commercial credit scores. CBA also caters to individual customers who require credit reports for compliance processes, employee screenings and KYC checks. In Singapore, MAS regulations require credit health checks for those seeking employment in FIs for financial soundness, while the Casino Regulatory Authority imposes the same checks to be done on potential staff members. CBA is a leading player in the CRIS market in Southeast Asia, which has a combined population of more than 108m across Singapore, Malaysia, Cambodia and Myanmar as at 31 Dec 2019. Key growth drivers of the FI Data Business include credit growth (through an increase in mortgages, credit card applications, etc.) and the addition of new bureau members (increase in rate of CRIS market penetration).

Non-FI Data Business CBA’s Non-FI Data Business is conducted through D&B Singapore and D&B Malaysia. There are three main sub-segments: 1) global credit risk management solutions (GCRMS), 2) Singapore Commercial Credit Bureau (SCCB) and other bureaus, and 3) sales/marketing solutions, receivables management services, and other revenue.

Global Credit Risk Management Solutions Under the GCRMS sub-segment, CBA sells reports through the proprietary D&B database, called the GCRMS platform, to end-users in Singapore and Malaysia and to international customers. Concurrently, the group purchases reports and data from D&B. Reports generated under this sub-segment include financial stress scores, ownership structure reports and global family tree reports.

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

Singapore Commercial Credit Bureau and other bureaus CBA provides risk management solutions from business information sourced from its own proprietary database, third-party sources and reports branded under SCCB’s umbrella. Products include commercial enquiries, payment assessments, individual searches and winding-up search reports. A notable offering in this sub-segment is the Telco Credit Bureau Singapore platform, which provides information on consumer’s telecommunication payment defaults. We understand that data collection from other industries, such as insurance, securities firms and moneylenders, are a likely feature going forward.

Sales/marketing solutions, receivables management services, and other revenue CBA also offers sales and marketing solutions to help businesses get leads and grow sales revenue by providing access to marketing data. There are also debt recovery services through lawful and legitimate channels, such as dunning letters and monthly status reports. Also, the group offers business education services, which include training programmes on topics ranging from finance to human resource.

Figure 10: Breakdown of Non-FI Data Business revenue in FY20 Figure 11: Core products and services of the Non-FI Data Business

Sales and marketing solutions, receivables management, and other revenue 16%

Singapore Global credit Commercial risk Credit Bureau management 28% solutions 56%

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

INDUSTRY OVERVIEW Trade and business growth as an enabler of CRIS The aftermath of the global financial crisis (GFC) prompted governments around the world to require financial institutions and commercial entities to establish more robust risk management frameworks to uphold financial stability according to F&S. A by-product of this was the rise of the CRIS industry. In the years following the GFC, growth in the East Asia and Pacific region picked up to an average 4.5% p.a. over 2010 to 2018, from a dismal 1.4% in 2009, according to data from the World Bank as the region saw an improvement in consumer sentiment and a pick-up in trade and business activities. The elevated demand for credit information stemmed from two ends — FIs needing to assess the creditworthiness of their borrowers, and businesses requiring information on their suppliers, vendors, partners and customers to assess counterparty risks, according to F&S.

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

Rising population and urbanisation in SEA will spur growth of credit demand In addition to Singapore, CBA’s operations span Malaysia, Cambodia, and Myanmar. These regional countries provide sizeable credit growth potential, given their population growth trajectories and rising urbanisation rates. Population growth of these economies is likely to increase steadily, with Cambodia leading the pack at a forecasted CAGR of 1.5% over the next five years to 17.8m (according to F&S). Meanwhile, the human capital base of Singapore, Malaysia and Myanmar are expected by F&S to grow at CAGRs of 0.6%/1.2%/0.6% to reach 5.8m/34.9m/54.7m people. Notably, the increased urbanisation of developing economies via a rise in financial inclusion and education levels also bodes well for credit growth. On this end, there is much to expect from Cambodia (26% urbanisation in 2020) and Myanmar (33%) going forward, given the room for expansion of the economy.

Stable operating environment and high income levels are key drivers of CRIS in Singapore As SEA’s most developed economy, solid macroeconomic foundations underpin high income levels and strong purchasing power among Singapore’s citizens. In turn, this drives demand for credit facilities and, consequently, the CRIS market in the city state.

Rising personal consumption and trade to drive FI Data Business growth The CRIS industry in Singapore is estimated to be worth S$73.0m in 2019, representing a 8.3% CAGR since 2015, according to F&S. This was primarily driven by rising demand from customers and the introduction of new products and services by CRIS providers, according to F&S. The FI Data Business is primarily driven by an increase in private consumption (hard assets and financial products) from population growth and a rise in financial sophistication, as well as higher trade volumes, according to F&S. The upcoming introduction of digital banking licences (four digital wholesale and full banking licences) should improve transaction speeds and the wider adoption of cashless payment methods, adding to overall credit growth in the longer run, in our view. F&S expects the industry in Singapore to expand 10.3% over the next five years to S$119.4m by 2024. Broadly, we see mortgage loan growth, credit card transactions, working capital business loans, as well as trade volumes (given Singapore’s position as an economic hub), to be the main segments leading credit growth and, therefore, CRIS growth. Supported by refinancing activity and liquidity drawdowns, we project Singapore banking system loan growth to recover to c.4-5% in 2021F (vs. 2020: 4.2%).

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

Figure 12: Singapore credit and risk information solutions industry’s market value

160

140 119.4 120 110.2 100.9 100 91.1 81.8 73 80 68.2 80.6

(S$'m) 62.2 75.7 57.4 70.7 60 53.1 65.3 60.2 55.5 40 45.8 51.7 38.7 41.5

20 34.5 38.8 25.8 30.2 14.4 15.9 16.4 16.5 17.5 21.6 0 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F 2024F

FI Non-FI

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, FROST & SULLIVAN

Healthy housing loan growth an indicator of a flourishing economy Singapore’s c.6 million population (as of 2020) supports a steady housing loan growth, rising 2.5% annually over the FY16-20 (according to MAS data on housing loans in the domestic banking unit). CGS-CIMB projects private primary transaction volumes of c.9,000-10,000 units in 2021F, which would support mortgage growth in the city state in anticipation of rising demand from its growing adult population.

Figure 13: We expect Singapore’s 2021F loan growth to be supported by delayed business expansion and stronger trade activity, and for GDP growth to as businesses resume operations

15.0% 34.0%

13.0% 29.0%

11.0% 24.0%

9.0% 19.0% 7.0% 14.0% 5.0%

9.0% 3.0%

1.0% 4.0%

-1.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020F2021F -1.0%

GDP growth (LHS) System loan growth (RHS) System deposit growth (RHS)

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, MONETARY AUTHORITY OF SINGAPORE

Discretionary spending via credit cards present financing growth opportunities Fuelled by the rise of e-commerce and online transactions, total credit card billings in Singapore rose 8.7% over the past five years. Worldpay’s Global Payment Report 2020 estimates that credit card transactions accounted for 56% of e-commerce transactions in Singapore in 2019, making it the city state’s preferred medium of payment. That said, Singapore had the lowest credit card penetration rate for individuals aged 15 years and above at 49%, which was lower than the average of c.65% in other developed nations of Australia, UK, US

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

and Japan in 2017. We believe there are significant opportunities of growth for credit card penetration to spur larger transaction volumes and card spend. We believe the onset of digital banks and financial technology (fintech) in ASEAN will aid the movement towards becoming a cashless society, raising the number of digital payment transactions. We think that customer due diligence will be a necessity in this pursuit, raising the demand for CRIS services from banks and merchants alike.

Figure 14: Credit card billings in Singapore registered a CAGR Figure 15: Credit card penetration in Singapore vs. selected of 7.4% over 2015-2019 as e-commerce gained traction countries

80,000 6,800,000 Title: 90% Source: 83% 70,000 6,750,000 80% 77% 72% 68% 60,000 66% 66% 70% 64% 64% 65% 6,700,000 62% Please fill62% in the values above to have them entered in your report 59% 60% 60% 60% 50,000 52% 49% 6,650,000 50% 40,000 37% 40% 35% 6,600,000 30,000 30%

6,550,000 20% 20,000 10% 10,000 6,500,000 0% 2011 2014 2017 - 6,450,000

2015 2016 2017 2018 2019 Singapore Australia UK US Japan Canada

Total credit card billings (S$m) (LHS) Number of cardholders (RHS)

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, MONETARY AUTHORITY OF SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, FROST & SULLIVAN SINGAPORE

Significant trade volumes to support CRIS demand, given Singapore’s open economy Singapore’s economy is highly trade dependent and has one of the largest number of free trade agreements (FTA) in the APAC region, according to F&S. According to the Asian Development Bank, Singapore penned 36 of these agreements with trade partners in 2019, more than major APAC economies such as China and India, both with 30 FTAs each. To this end, Singapore recorded a total trade value of S$1,022.2b (or c.2.2x of GDP) in 2019, according to F&S. Data from the World Bank showed that Singapore’s trade-to-GDP ratio of c.319% in 2019 is among the highest globally, above the world average of c.60%. While Covid-19 has put a dampener on expansionary credit growth and trade volumes, given the prolonged border closures globally, credit bureaus are well placed to benefit from the influx of credit information requests surrounding concerns of credit worthiness and cash flow pressures faced by businesses due to operational disruptions. We believe that CRIS monitoring services will take centre stage in the near to medium term as economies recover from the pandemic, offsetting near-term declines in expansionary-driven credit information sales.

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

Figure 16: Total merchandise trade at current prices, Singapore (2014-2019)

1200 1,055.9 1,004.7 1,022.2 1000 967.1 915.2 870.2

800 500.2 489.7 478.6 452.1 423.4 403.3

600

(S$'bn) Trading Value Trading 400

526.1 555.7 532.5 491.8 466.9 515 200

0 2014 2015 2016 2017 2018 2019

Exports Imports

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, FROST & SULLIVAN

18-year credit history bank base results in high barriers of entry into FI Data Business Credit bureaus in Singapore are governed by three main policies. Firsty, the Personal Data Protection Act 2012 requires CBA to abide by general data protection laws when handling data received from its suppliers. Secondly, under the Banking Act in Singapore, credit bureaus can only disclose the credit and risk information collected to member institutions and are subjected to regulatory oversight from MAS. CBA’s position as a leader in the FI Data Business in Singapore is further underpinned by its 18-year credit history bank and bureau member base of 31 FIs. New entrants into the FI Data Business in Singapore will face the challenge of accumulating years of credit information given the lack of scale of bureau membership. At present, CBS is Singapore’s only comprehensive consumer credit bureau with full industry uploads from its members, which comprise all retail banks and major FIs in Singapore. Notably, the Association of Banks Singapore is also a shareholder of CBS.

Any person that desires to carry out a credit reporting business in Singapore is required to be licensed under the Credit Bureau Act when it comes into effect (the Credit Bureau Act was passed in parliament in November 2016 but the effective date has not been announced). The Credit Bureau Act permits credit bureaus to collect and use FI data regarding individuals, but does not presently regulate the Non-FI Data Business of commercial credit information.

The Credit Bureau Act will cover the following once formalised:  MAS will have the authority to issue, review, suspend and revoke credit bureau licences.  MAS will exercise supervisory oversight and regulate the industry for breach of the Credit Bureau Act.  The formalisation of existing and upcoming standards for licensed credit bureaus and their members.  The reinforcement of consumers’ right to access, including the ability to review and rectify credit records.

Under the Non-FI Data Business, in relation to Telco Credit Bureau Singapore, the Telecom Competitions Code governs the use of end-user service information by telecoms in Singapore. Telecom providers are required to protect all information obtained from end-users as a result of them providing services, such

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as customer usage patterns, telephone number and network configuration, address and credit history.

Fragmented operating landscape in Malaysia Strong growth trajectory of CRIS industry in Malaysia The enactment of the Credit Reporting Agencies Act (CRA Act) in 2010 effectively spurred the growth of the CRIS industry in Malaysia. The industry was estimated to be worth RM219m in 2019, according to F&S. The ramp-up of these services was primarily driven by rising adoption rates of credit information by both FIs and commercial entities in business operations, according to F&S. The developing status of Malaysia underpins the latent demand for credit facilities from a growing working class and the increased sophistication of financial knowledge market participants.

Figure 17: CRIS market value in Malaysia is estimated by F&S to expand by 16.7% over 2020-2024F

500 474.7 Title: Source: 450 410.6 400 Please fill in the values above to have them entered in your report 355.1 350 303.5 300 259.3 250 218.9

200 184.8

Revenue Revenue (RM million) 151.4 150 118.1 89.9 100

50

0 2015 2016 2017 2018 2019E 2020F 2021F 2022F 2023F 2024F

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, FROST & SULLIVAN

From the perspective of credit growth, F&S estimates the average household disposable income per capita in Malaysia to reach RM36,100 in FY24F (from RM23,800 in FY18). We believe that the progression in wealth accumulation, alongside the nation’s 1.3% population growth rate (forecasted CAGR over FY19-24F by F&S, should support underlying demand for credit information on individuals in coming years. On the commercial side, SMEs (small and medium enterprises) form a vital component of the Malaysian economy — SME Corporation Malaysia estimates that these businesses contributed c.38% to GDP in FY18. The central bank states that more than 90% of SMEs’ financing needs were met through bank loans, and these accounted for half of the financial system’s total loans in FY18, according to F&S. While we expect this segment to remain as the driver of loan growth in Malaysia, we are cognisant of the accompanying risks associated with SMEs. On both sides of the coin, credit reporting agencies (CRAs) are crucial in assessing the creditworthiness of an entity for due diligence in the extension of new facilities, as well as for the monitoring of cashflow during periods of weaker economic sentiment. We believe the latter to be especially prominent in months to come in the aftermath of the Covid-19 pandemic as businesses adjust to a new economy.

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Alternative lending channels to boost CRIS demand In addition to the formal banking system, we also expect alternative lending channels to provide a boost for CRIS demand in Malaysia. The Securities Commission of Malaysia introduced P2P (peer-to-peer) financing in 2016 to expand financing options for SMEs and to enable greater financial inclusion through the use of fintech, according to F&S. P2P financing is a digital platform facilitating businesses to raise funds from both retail and sophisticated investors. While helpful in providing an additional means to obtain financing, we understand that businesses seeking financing via P2P platforms may have had challenges in obtaining bank loans, be it due to unproven business models or relatively short operating track records. According to market research by F&S, P2P platforms require these bids to be accompanied by verified business information and assigned risk scores — both of which will drive the need for CRIS in Malaysia.

Figure 18: Transaction values of the Malaysian alternative lending market are forecasted by Statista to contract in 2020F due to weaker economic sentiment, before staging a recovery in 2021F

14.0 22.0 21.6 Title:

21.5 Source:

13.5 20.8 21.0 Please fill in the values above to have them entered in your report 20.5 13.0 19.9 20.0 Thousands

12.5 19.2 19.5 US$ m US$ 18.8 19.0 12.0 18.5

18.0 11.5 17.5 12.2 12.8 13.6 12.5 13.8 11.0 17.0 2017 2018 2019 2020F 2021F

Total transaction value (LHS) No. of loans (RHS)

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, STATISTA

Fragmented operating landscape in Malaysia due to liberal regulatory environment Malaysia’s CRIS provider landscape comprises a number of public and private CRAs. Public agencies such as Central Credit Reference Information System (CCRIS) are under the direct supervision of Bank Negara Malaysia, while private ones, including CTOS Data Systems, Credit Bureau Malaysia (CBM) and D&B Malaysia, are regulated under the CRA Act 2010. F&S reports that CTOS and CBM dominate the private CRA space, accounting for c.77% of private CRIS revenue in Malaysia in FY18. D&B Malaysia is a relatively small player in this regard, with a market share of c.2% (in 2020). CBA has completed the sale of its equity interest in CBM to Sunway Holdings Sdn. Bhd. for RM3.5m (or c.S$1.1m) on 3 Jun 2020. CBA now offers only Non-FI Data CRIS services in Malaysia via D&B Malaysia.

CRAs in Malaysia are governed under the CRA Act. The CRA Act provides a legal framework to facilitate the sharing of credit and risk information as well as to protect consumers’ right to privacy. The Registrar Office of Credit Reporting Agencies (operating under the Ministry of Finance) is the enforcer of the CRA Act and regulates the CRAs. All registered CRAs may purchase FI data from CCRIS.

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Unlike Singapore, CRAs in Malaysia are allowed to collect data on both individuals and companies. The difference between the CRAs in Malaysia depends on whether they are regulated or not. Non-regulated CRAs are not allowed to collect and provide credit and risk information from and to any Malaysian individual or company. Hence, unregulated CRAs are confined to serving customers wishing to purchase credit information regarding foreign entities.

Capturing growth in Cambodia’s emerging credit sector Cambodia is one of the fastest-growing economies in SEA, with its GDP expanding 7.0% in FY19, according to F&S. Growth is expected to remain strong given a robust construction sector and continued demand for exports, according to F&S. Cambodia boasts a young workforce (c.71% of its population being younger than 40 years of age by 2024, according to estimates from the United Nations Department of Economic and Social Affairs) with high unbanked and underbanked levels (World Bank estimated that c.22% of adults had a bank account in 2017), thereby laying the groundwork for significant growth potential for CBC as the sole credit bureau in Cambodia. Notably, Cambodia’s CRIS industry comprised only consumer credit reporting up until 2019, as commercial credit reporting began only in Jul 2019.

Fragmented landscape cements importance of centralised CRIS database According to F&S, Cambodia’s CRIS industry was estimated to be worth USD7.4m in 2019, representing a robust c.16% average annual growth from USD4.2m in 2015. As a growing economy, Cambodia’s banking system is fragmented and comprises a myriad of 432 commercial, specialised, and representative offices of foreign commercial banks, as well as microfinance, microfinance deposit-taking and rural credit institutions, and includes financial leasing and payment companies as at 2019, according to F&S. Against this backdrop, we believe that CBC plays a crucial role as a centralised and regulated database of credit information in Cambodia to facilitate efficient economic growth (enabling efficient lending to creditworthy entities) while safeguarding financial stability (through the monitoring of repayment capabilities). At present, only 165 of the mentioned institutions of Cambodia’s banking system are members of CBC (as at 30 Jun 2020), thus presenting ample opportunity for an enlarged business scope for CBC.

Figure 19: Cambodia credit and risk information solutions industry’s market value

16.0 Title: 14.4 Source: 14.0 12.8 Please fill in the values above to have them entered in your report 12.0 11.2

9.9 10.0 8.8

8.0 7.4 6.3 6.0

Revenue Revenue (US$ million) 6.0 4.7 4.2 4.0

2.0

0.0 2015 2016 2017 2018 2019E 2020F 2021F 2022F 2023F 2024F

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, FROST & SULLIVAN

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Microfinance institutions as a key driver of CRIS demand The NBC in its 2018 annual report reported credit growth of 20.1% yoy to US$19.6bn in FY18, and we expect continued growth in the financial sector to underpin the demand for CRIS services going forward. In addition to banks, microfinance institutions play a critical role in easing the access to credit in Cambodia. As MFIs typically take on higher risks given their target customer profiles of lower-income individuals and businesses, we believe it is likely that CRIS services will remain, or become, an integral part of their risk management processes.

Significant lending growth potential from large unbanked population The World Bank reported in its Findex Database 2017 that only 22% of adults in Cambodia owned a bank account – this is relatively low compared to regional peers such as Laos’ 29% and Vietnam’s 31%. As the population gets increasingly urbanised, we expect the banked population in Cambodia to grow in tandem. Consequently, we expect this to raise demand of banking and financial services by consumers which will drive the demand for credit information.

Figure 20: Cambodia’s 22% banked population is the lowest amongst regional peers (2017)

90% 82% 80%

70%

60% 49% 50%

40% 31% 29% 30% 22% 20%

10%

0% Cambodia Laos Vietnam Indonesia Thailand

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, GLOBAL FINDEX DATABASE, WORLD BANK, FROST & SULLIVAN

Regulatory environment supportive of CRIS development The NBC monitors and regulates credit reporting systems providers (CRSP). In turn, CRSPs are governed by a Prakas (Regulation Issued by the Minister or Governor of Bank of Cambodia) on credit reporting, which came into effect in May 2011. Under the Prakas, all FIs in Cambodia are required to provide data to credit bureaus, whether positive or negative.

In 2019, NBC granted the approval for CBC to carry out commercial credit reporting activities in Cambodia. With such approval, CBC started serving commercial credit information to businesses as part of its offerings in Jul 2019, further cementing its stronghold in the industry as the sole CRA.

In addition, CBC enjoys strong institutional support from its stakeholders, including NBC, FIs in Cambodia, the Association of Banks in Cambodia and Cambodia Microfinance Association.

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First-mover advantage in Myanmar Structural reforms will improve the outlook for trade In 2019, Myanmar was ranked 171st out of 190 economies by World Bank in terms of ease of doing business. F&S expects Myanmar’s National League for Democracy (NLD) to continue pushing for reforms in the country to reduce bureaucracy and corruption to create a conducive environment to conduct trade to boost overall economic activity. The NLD also established three special economic zones (SEZ) namely the Thilawa SEZ, Dawei SEZ and Kyauk Phyu SEZ, aimed at attracting foreign investments into the country. In addition, the National Export Strategy 2020-2025 aims to address competitiveness constraints and modernise regulatory systems to boost Myanmar’s industries to increase their exports.

Figure 21: The CRIS market value in Myanmar is estimated to reach US$12.3m by 2024F

14.0 Title: 12.3 Source: 12.0 Please fill in the values above to have them entered in your report 10.0 9.6

8.0 6.6

6.0 Revenue Revenue (US$ million)

4.0 3.5

2.0 1.5

0.0 2020F 2021F 2022F 2023F 2024F

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

Myanmar CRIS FI data industry is primed for exponential growth MMCB was granted a licence in 2018 by the Central Bank of Myanmar to establish a credit bureau, and the entity is projected to be operational by 4Q2020. According to F&S, Myanmar’s FI Data Business is forecasted to be worth US$1.5m in FY20F and to log exponential growth of c.69% to reach a market value of US$12.3m by FY24F, as MMCB collects and distributes credit and risk information to member FIs. Other industry drivers, such as rising economic growth (average GDP growth of 6.4% over FY17-19), a growing banked population (the World Bank reports that only 26% of adults had a bank account in Myanmar in FY17) and the adoption of technology, should also contribute positively to the expansion of the industry.

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Figure 22: Myanmar’s banking system loans (business and personal) rose c.24% (CAGR) to MMK27tr (c.S$27bn) in 2018

30,000 26,671

25,000

20,000

15,000

11,294 Kyat (billion) Kyat 10,000

5,000

0 2014 2018

Trading Construction Agriculture Services General Production SME loans Transportation Hire Purchase Housing Loans Total

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, CENTRAL BANK OF MYANMAR, FROST & SULLIVAN

First-mover advantage in Myanmar’s FI Data Business The Central Bank of Myanmar regulates and has direct supervision over credit bureaus in Myanmar. As the representative of banks in the country, the Myanmar Banks Association works in partnership with credit bureaus for the provision of CRIS services. Under the Financial Institution Law 2016, credit bureaus may provide credit information to member FIs only.

MMCB was established in 2018 after having successfully obtained the sole FI Data Business licence from the Central Bank of Myanmar. Two other Non-FI Data Business players operate in Myanmar. There are 220 FIs in Myanmar, which would potentially become members of MMCB and suppliers and customers of MMCB when MMCB commences operations.

KEY RISKS Regulatory requirements, licences and approvals under the Credit Bureau Act CBA is subject to national laws and the jurisdiction of the credit reporting industry. In Singapore, CBS was officially gazetted as a credit bureau under the Banking Act in 2002, and CBS thereafter functioned as a financial risk management tool for banks to assess credit risks of customers. A change in stance by regulatory authorities could structurally affect CBA’s business model. CBS will also need to adhere to the Credit Bureau Act, which stipulates that credit bureaus in Singapore must apply in writing to the MAS for a licence that is valid for five years or less, based on the stipulation of the MAS. If CBS is unable to obtain a licence under the Credit Bureau Act to continue its current operations, it will be required to cease its business operations as a credit bureau.

Reliance on minority stakes and JV service agreements CBA is limited in its scope to independently implement strategic decisions given its minority stakes in its Cambodia and Myanmar entities. JV partnerships with Equifax, D&B, Credit Bureau Holdings (Cambodia) and MB Investments Ltd feature prominently in its business model, as the JV partners provide certain technology and data inputs for the business. Examples of such technology and data input are credit data packets and credit scoring algorithms, tying together credit history, litigation and bankruptcy information for commercial and consumer

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credit reports, as well as company ownership information in building comprehensive credit risk profiles. We deem the reliance on these partnerships a key risk, but given the long-standing track record of these relationships, we do not expect a cessation of these business relationships. CBA may also exercise influence over CBC and MMCB’s strategic direction via its board seat in these entities. However, if there is a buy-out of CBA’s minority stakes for any reason, this could de-rail expansion developments.

Customer concentration risk The group’s Non-FI Data Business depends significantly on D&B, who is both a major customer and supplier. In 2019, the sale of reports to D&B accounted for approximately c.21% of the group’s total revenue. Additionally, the Non-FI Data Business depends on data, reports and technology supplied or licensed by D&B. In 2019, approximately c.13% of the group’s total direct cost was paid to D&B, for the provision of services. While the group has a long-standing working relationship with D&B and has had smooth experiences in respect of renewal of commercial terms, termination or non-renewal will materially and adversely affect the group’s financial condition. Apart from D&B, the subsequent five largest customers accounted for c.28% of FY19 total revenue.

Cybersecurity risk Potential data and privacy breaches as well as cybersecurity violations are a key risk to CBA’s operations given that it manages highly sensitive financial data of individuals and corporations. Consequential reputational risk from a data breach is a concern as well. To this end, Equifax (CBA’s JV partner) suffered a significant data breach involving the data theft of 143m customers in Mar 2017, raising the alert on possible cyberattacks on other data providers. In any case, CBA was unaffected by the breach (CBA and Equifax have unrelated operating platforms).

FINANCIALS Resilient earnings across economic cycles We factor in sustained demand for credit information in FY21-23F as credit demand picks up pace in tandem with progressive economic recovery post- Covid-19 uncertainties. CBA’s operating trends were resilient through the regional lockdowns, with revenues rising +7.2% yoy to S$43.4m in FY20. Topline earnings stability was most apparent in CBA’s Non-FI Data Business, where revenue rose +8.2% yoy to S$25.7m in FY20, driven by increased demand from compliance and risk management reviews. While CBA similarly recorded stronger demand for bulk review reports from FI customers, reduced volumes of new loan applications had slowed overall FI Data Business revenue growth in FY20 (+4.7% yoy to S$17.7m in FY20). Adjusting for c.S$1.4m in listing expenses, PATMI rose 11% yoy to S$8.2m in FY20.

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Figure 23: CBA’s historical and forecasted revenue by segments Figure 24: CBA’s historical and forecasted PAT and PATMI

40 14% 30 Title: 40% Title: Source: Source: 35 12% 35% 25 30 Please fill in the values above to have them entered in your report Please fill in the values above to have them entered in your report 10% 30%

25 20 8% 25%

S$ S$ million 20 15 20% 6%

15 S$ million 15% 4% 10 10 10% 5 2% 5 5% 0 0% 2017 2018 2019 2020 2021F 2022F 2023F 0 0% 2017 2018 2019 2020 2021F 2022F 2023F FI Data Business revenue Non-FI Data Business revenue FI Data Business yoy growth (%) Non-FI Data Business yoy growth (%) PAT PATMI PAT yoy growth (%) PATMI yoy growth (%)

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS Note: FY21F yoy PATMI growth (lower than PAT) was due to listing expenses being incurred in FY20 at CBA’s company level. These expenses were not attributed to minority interests.

Going forward, we factor in c.8-11% yoy revenue growth over FY21-23F as we account for rising volumes of new loan applications (we expect c.5-6% in FY21- 22F vs the c.1% contraction in FY20) and trade transactions, offsetting a gradual reduction of risk review reports as market uncertainties ease. This translates to core net profit growth of c.8-16% yoy in FY21-23F. Quicker traction in regional operations, an additional revenue stream from the commencement of commercial credit bureau operations (under the FI Data Business segment), and the incoming digital banks in Singapore as suppliers and customers of the FI Data Business are key catalysts to our estimates.

Figure 25: Income Statement FYE Dec (S$) 2017 2018 2019 2020 2021F 2022F 2023F Revenue 35.7 37.4 40.6 43.4 48.3 52.7 57.1 - FI Data Business 15.7 15.8 16.9 17.7 19.4 21.0 22.4 yoy growth (%) 0.6% 7.2% 4.7% 9.5% 8.0% 7.0% - Non-FI Data Business 20.0 21.5 23.7 25.7 28.9 31.7 34.7 yoy growth (%) 7.5% 10.2% 8.2% 12.5% 10.0% 9.3% Other operating income 0.2 0.3 0.8 2.7 0.4 0.3 0.3 Employee benefits expense (9.4) (10.1) (9.7) (11.4) (10.7) (11.3) (12.0) Write back for loss allowance on trade receivables 0.1 0.0 0.0 (0.0) - - - Depreciation and amortisation expense (3.0) (2.5) (4.3) (4.1) (4.2) (4.3) (4.5) Corporate action expenses - - (0.4) (1.4) - - - Other operating expenses (12.0) (12.2) (9.0) (9.1) (10.0) (11.6) (13.1) Finance costs - - (0.3) (0.2) - - - Share of result of joint ventures 1.2 1.2 1.1 0.9 1.0 1.2 1.5 Profit before tax 12.7 14.1 19.0 20.8 24.8 27.1 29.3 Income tax expense (1.4) (2.1) (3.2) (3.1) (3.7) (4.1) (4.4) Profit for the year 11.3 12.0 15.9 17.6 21.1 23.0 24.9

Profit attributable to: Owners of the Company 5.2 5.5 7.0 6.8 9.5 10.4 11.2 Non-controlling interests 6.1 6.5 8.8 10.8 11.6 12.7 13.7

Profit for the year excluding listing expenses 11.3 12.0 16.2 19.0 21.1 23.0 24.9 PATMI for the year excluding listing expenses 5.2 5.5 7.4 8.2 9.5 10.4 11.2

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

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Figure 26: Balance Sheet FYE Dec (S$) 2017 2018 2019 2020 2021F 2022F 2023F ASSETS Cash and bank balances 24.3 25.1 34.6 54.7 54.0 54.0 54.9 Cash and cash equivalents 19.7 13.3 27.6 48.8 48.1 48.2 49.0 Deposit with maturity more than 3 months and restricted cash 4.5 11.9 7.0 5.8 4.8 4.8 4.8 Bank overdraft and restricted cash 1.1 1.1 1.1 Trade receivables 4.2 4.2 4.9 5.5 3.7 6.4 4.6 Loan receivable 0.0 0.0 0.0 - - - - Other receivables and deposits 1.6 2.6 1.1 0.8 0.8 0.8 0.8 Prepayment 0.2 0.3 0.3 0.6 0.6 0.6 0.6 Tax recoverable 0.0 0.1 0.2 0.2 0.2 0.2 0.2 Total current assets 30.3 32.3 41.1 61.7 59.2 61.9 61.0

Property, plant and equipment 2.7 1.7 1.7 1.9 5.0 5.7 6.4 Right-of-use assets - - 4.0 3.3 2.9 2.2 2.5 Intangible assets 1.2 1.1 2.4 3.1 3.2 3.2 3.2 Club membership 0.6 0.6 0.5 0.4 0.4 0.4 0.4 Goodwill 7.7 7.7 7.7 7.7 7.7 7.7 7.7 Investment in associate ------Investments in joint ventures 4.4 4.6 4.9 6.0 7.0 8.3 9.7 Total non-current assets 16.7 15.6 21.2 22.5 26.2 27.5 30.0

Total assets 47.0 47.9 62.4 84.3 85.4 89.4 91.0

LIABILITIES AND EQUITY Bank overdrafts - - - 0.6 0.6 0.6 0.6 Trade and other payables 3.7 3.6 4.6 4.4 3.5 5.2 4.2 Dividend payable - - 11.8 1.5 1.5 1.5 1.5 Amounts due to related company 2.0 2.0 - 1.3 1.3 1.3 1.3 Lease liabilities - - 2.2 2.4 2.4 2.4 2.4 Deferred income 10.1 9.6 9.7 9.6 9.6 9.6 9.6 Income tax payable 1.9 2.2 2.9 4.1 4.1 4.1 4.1 Total current liabilities 17.8 17.5 31.2 24.0 23.0 24.7 23.8

Non-current liabilities Deferred tax liabilities 0.3 0.1 0.1 0.4 0.4 0.4 0.4 Lease liabilities - - 2.1 1.3 1.3 1.3 1.3 Total non-current liabilities 0.3 0.1 2.3 1.7 1.7 1.7 1.7

Total liabilities 18.0 17.5 33.4 25.7 24.8 26.4 25.5

Capital and reserves Share capital 6.9 6.9 0.0 35.1 35.1 35.1 35.1 Capital contribution pending allotment - - 9.6 - - - - Merger reserves - - (0.4) (0.4) (0.4) (0.4) (0.4) Other reserves - - (1.9) (1.9) (1.9) (1.9) (1.9) Translation reserves 0.1 0.0 (0.1) (0.1) (0.1) (0.1) (0.1) Retained earnings 7.4 8.7 8.4 11.0 11.9 13.0 14.1 Equity attributable to owners of the company 14.4 15.6 15.7 43.6 44.6 45.6 46.7 Non-controlling interests 14.6 14.8 13.2 15.0 16.1 17.4 18.8

Total equity 28.9 30.4 29.0 58.6 60.7 63.0 65.5 Total liabilities and equity 47.0 47.9 62.4 84.3 85.4 89.4 91.0 SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

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Figure 27: Cash Flow Statement FYE Dec (S$) 2017 2018 2019 2020 2021F 2022F 2023F Cash generated from operations 12.3 14.0 21.847 22.2 28.7 29.0 33.1 Interest received 0.1 0.1 0.3 0.1 0.1 0.1 0.1 Interest paid 0.0 Income taxes paid -1.5 -2.2 -2.4 -1.7 -3.7 -4.1 -4.4 Net cash from operating activities 10.9 12.0 19.77 20.6 25.1 25.0 28.8

Cash flow from investing activities Dividends received from joint venture 0.4 0.9 0.3 1.0 0.0 0.0 0.0 Investment in a joint venture -0.8 0.0 0.0 0.0 Acquisition of businesses under common control 0.0 0.0 -9.3 0.2 0.0 0.0 0.0 Purchase of property, plant and equipment -0.9 -0.3 -1.3 -0.9 -5.8 -3.3 -4.5 Purchase of intangible assets -0.8 -0.8 -2.1 -0.5 -1.0 -1.0 -1.0 Proceeds from disposal of an associate 1.1 Withdrawal (Placement) in long term deposits 0.4 -7.8 5.7 1.1 0.0 0.0 0.0 Net cash used in investing activities -0.9 -8.0 -6.7 1.2 -6.8 -4.3 -5.5

Cash flow from financing activities Issuance of shares 0.0 0.0 0.0 27.0 0.0 0.0 0.0 Capital contribution received 0.0 0.0 9.6 0.0 0.0 0.0 0.0 Listing expenses paid 0.0 0.0 -0.1 -1.4 0.0 0.0 0.0 Dividends paid -21.7 -10.4 -5.9 -23.6 -19.0 -20.7 -22.4 Loan receivable 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Repayment of lease liabilities 0.0 0.0 -2.3 -2.6 0.0 0.0 0.0 Net cash (used in) from financing activities -21.7 -10.4 1.3 -0.6 -19.0 -20.7 -22.4

Net (decrease) increase in cash and cash equivalents -11.7 -6.4 14.4 21.2 -0.7 0.0 0.9 Cash and cash equivalents at beginning of year 31.4 19.7 13.3 27.6 48.8 48.1 48.2 Effect of foreign exchange rate changes on the balance of cash held in FX 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Closing cash and cash equicalents 19.7 13.3 27.6 48.8 48.1 48.2 49.0 SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

Strong operating cashflow generation CBA is in the business of aggregating market credit information to be repackaged and transformed into useable reports and data packets. The information is supplied to customers on a subscription basis, but one-off requests are available as well. Credit reports and data packet subscriptions are customised to parameters required by customers, and are drawn-down upon until exhausted. Top-ups of subscription packages are on a needs basis, based on increased credit demand or additional monitoring needs. Notably, about a third of fees from the Non-FI Data Business in Singapore are received in advance and sales contracts are non-cancellable. Deferred income came up to S$9.6m in FY20 (c.22% of FY20 revenue) — comparable to the S$9.7m as at end-Dec 19 and S$9.6m as at end-Dec 18 — providing revenue visibility over the coming 12 months.

CBA’s capex needs are largely confined to the replacement and upgrading of IT, digital, compliance and cybersecurity infrastructure, given the asset-light nature of its operations. This includes costs to upgrade computer software every three to five years (FY19: S$3.1m, FY17-18: S$1.3-1.5m). We expect CBA’s net cash position to continue to strengthen in FY20-22F, given its strong free cashflow generation, and believe that this will be more than sufficient to cover future development capex (c.S$4m in FY21F, normalising to c.S$1.5m thereafter). We expect CBA’s free cashfows to rise from S$9.4m in FY20 to c.S$16m in FY23F, amply covering capex needs.

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Singapore as main driver of growth as regional operations ramp up CBA’s home market of Singapore drives the bulk of its earnings, recording 93% of PBT in FY20, and its business in Malaysia turned profitable having completed the disposal of its stake in CBM in Jun 20. Contributions from Cambodia accounted for 6% of this base.

Going forward, we expect the proportion of regional contributions to rise as business sentiments improve with the eventual reopening of country borders post-Covid-19. Increased credit quality surveillance as regional moratoriums taper off and the ramp-up of MMCB (given CBA’s proven track record of generating a positive PAT within two years with CBC) underpin our view of a more diversified earnings stream in the medium term.

Figure 28: Revenue breakdown by geography in FY20 Figure 29: PBT breakdown by geography

Malaysia 95% 3% 25 20.8 19.0 20 2% 6% 6% 14.1 15 12.7 7% 8%

10 S$'m

99% 98% 93% 5 95% Singapore 97% - -3% -6% -4% -1% -1% FY17 FY18 FY19 FY20

(5)

Singapore Cambodia Malaysia Myanmar

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

Consistent contributions from both business segments The Non-FI Data Business made up a larger 59% of revenue in FY20. Slightly more than half of this came from the GCRMS sub-segment (sale of reports and data on Singapore and Malaysia entities, as well as those on foreign entities purchased from D&B for resale), while close to a third comprised those from SCCB (commercial, individual and litigation reports; customers largely based in Singapore and Malaysia). Conversely, revenue from the FI Data Business amounted to 41% of revenue, primarily driven by the increase in bulk review reports as a result of an increase in the frequency of periodic reviews by FIs during the period of heightened credit risk. In FY20, these risk reviews offset the lower sales of consumer credit reports to CBS’s members for new credit applications (mortgage, credit cards, etc.) and bulk monitoring reviews. Notably, CBA’s pricing structure for both business segments has stayed stable over the past few years. The pricing structure of these reports and data packets depends on the complexity of information requested (e.g. breadth, monitoring period, country of domicile, etc.) and take-up volumes.

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Figure 30: Breakdown of revenue by segment

45

40 10% 35 11% 10% 17% 30 17% 18% 25 32% 20 29% 28% 9% 7% 18% S$million 2% 16% 15 2% 2% 32% 34% 10 42% 41% 40% 2% 1% 5 41% 40% 0 2017 2018 2019 1H19 1H20 Sales and marketing solutions and others (Non-FI segment) SCCB (Non-FI segment) Global credit risk management solutions (Non-FI segment) Other revenue (FI segment) Sale of reports (FI segment)

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS Note: Limited disclosure in FY20 financial statements

Minimal capex requirements; largely confined to technology upgrades Aside from staff costs, the major components of CBA’s operating expenses are royalties to data suppliers, report costs and data purchases, as well as the upgrade of digital and IT infrastructure. Notably, royalties are directly correlated with the sale of credit reports — the fee structure of royalties payable is largely based on a fixed percentage of sales (15-18% of total operating expenses in FY17-19), while report costs and purchases of data packages are direct input costs for the Non-FI Data Business. Consequently, EBITDA margins are largely correlated to revenue.

Adjusting for the reclassification of leases due to the adoption of IFRS16, CBA’s operating expenses (excluding staff costs) have been well contained at c.S$9m in FY19-20. Technology refreshes, as well as storage, hardware and software upgrades, comprise CBA’s largest capex needs. To this end, we factor in higher capex costs of c.S$4m in FY21F, and c.S$1.5m p.a. thereafter due to product end-of-life cycles and staggered upgrades of equipment. Further, our FY21F net profit estimate incorporates c.S$300,000 in government aid via the jobs support scheme, using CBA’s staff force of approximately 114 employees (of a total of 170) based in Singapore as the basis of our calculations. We expect EBITDA growth of 9-14% over FY21-23F, and for EBITDA margins to trend higher to c.60-61% over FY21-23F (FY20: 57%) as portfolio risk reviews lead revenue growth. Management guides that it is likely to recommend a dividend payout ratio of c.90% in FY21-22F.

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Figure 31: Employee benefit expenses, other operating expenses (mainly royalties, report cost and data purchases), depreciation and amortisation expenses form the bulk of CBA’s operating expenses (S$m)

35

30 1% 25 1% 35% 20 49% 49% 38%

S$'m 5% 15 2% 16% 10% 18% 10 12%

5 39% 41% 41% 43%

0 FY17 FY18 FY19 FY20

Employee benefits expense Depreciation and amortisation expense Corporate action expenses Other operating expenses Finance costs

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

VALUATION Discounted cashflow methodology Our DCF approach offers a fair value of S$311m, derived from our projected cashflow for FY21-23F, translating into a target price of S$1.53, implying 30x FY22F P/E. Our estimate is based on a risk-free rate of 1.5%, cost of equity of 7.0%, beta of 0.9x, and long-term growth rate of 1.3% (anchored on Singapore population growth rate and inflation). We assume that CBA will maintain minimal bank borrowings (FY20: S$0.6m). The DCF method was used to reflect CBA’s stable and recurring revenue streams.

Figure 32: DCF valuation FYE Dec (S$m) FY21F FY22F FY23F Terminal value Core net profit 9.5 10.4 11.2 Add: deprec. + amort. 4.2 4.3 4.5 Add: changes in working capital 0.9 (1.0) 0.9 Less: capex (4.0) (1.5) (1.5) Total FCF 10.9 12.2 15.2 328.4

Terminal growth rate (assumed) 1.2% Sum of PV of FCF 60.4 PV of terminal value (S$m) 250.3 Equity fair value (S$m) 310.7 Weighted average number of shares 203.5 Target Price 1.53

WACC Risk-free rate 1.5% Beta 0.9 Market risk premium 6.5% Cost of equity = WACC 7.0% SOURCES: CGS-CIMB RESEARCH ESTIMATES, COMPANY REPORTS

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

Figure 33: Peer comparison table

Target Market Dividend Yield Bloomberg Price Price Cap P/E (x) 3-year EPS P/BV (x) Recurring ROE (%) EV/EBITDA (x) (%) Company Ticker Recom. (lcl curr) (lcl curr) (US$ m) CY21F CY22F CAGR (%) CY21F CY22F CY21F CY22F CY21F CY22F CY21F CY22F Credit Bureau Asia Ltd CBA SP Add 1.26 1.53 216 27.0 24.8 15.8 5.8 5.6 20.6 21.8 7.8 7.3 3.2 3.5 TransUnion TRU US NR 88.23 na 16,825 26.9 23.9 32.5 5.7 4.9 18.6 18.2 17.8 16.2 0.4 0.4 Equifax Inc EFX US NR 170.63 na 20,781 26.4 21.6 n.a. 5.8 5.1 21.3 23.2 15.8 13.5 0.9 1.0 FactSet Research Systems Inc FDS US NR 312.93 na 11,885 27.6 25.8 -5.9 11.2 10.4 42.5 39.8 21.5 20.2 1.1 1.2 NICE Information Service Co Lt 030190 ks NR 22900.00 na 1,225 24.8 21.5 n.a. 4.7 4.2 18.3 17.7 14.8 13.3 1.3 1.5 Dun & Bradstreet Holdings Inc DNB US NR 22.66 na 9,731 21.9 19.7 n.a. 2.9 2.7 13.6 10.6 15.0 13.9 0.0 4.4 Experian PLC EXPN LN NR 2414.00 na 30,796 28.5 27.0 -30.5 10.0 8.7 35.0 34.9 18.6 16.2 1.5 1.7 Simple average 26.2 23.5 -1.3 6.7 6.0 24.9 24.1 17.2 15.6 0.9 1.7 SOURCES: CGS-CIMB RESEARCH ESTIMATES, BLOOMBERG, COMPANY REPORTS Note: All forecasts for Not Rated companies are Bloomberg consensus estimates DATA AS AT 16 MAR 2021

SWOT Strengths: We believe that the key strength of CBA lies in its resilient business model through economic cycles. Underlying population growth will remain as a key driver of credit demand, while periods of weaker business sentiments will necessitate elevated levels of impairment-testing — both of which should spur demand for CRIS. CBA is highly cash generative and is likely to maintain its net cash position after funding capex needs. The monopolistic stronghold of CBA’s operations in Singapore, Cambodia, and its upcoming entry into Myanmar, underscores its stable earnings track record. Weaknesses: Increased oversight by regulatory authorities is likely to increase compliance costs in the near term. Cybersecurity risk is also a concern — we foresee IT-related capex to remain as recurring costs for CBA. There could also be execution risks in penetrating its new target market, Myanmar. Opportunities: The commencement of CBA’s operations in Myanmar is a key near-term growth catalyst. We expect MMCB’s growth trajectory to be broadly similar to that of CBC and project it to break even in 2-3 years. The on-streaming of digital banking licences (up to five each in Singapore and Malaysia) is also a key positive for CBA, increasing the scope of both suppliers and customers in the system. Financial inclusion benefits from these virtual players and fintech entities should bode well towards creating greater credit demand in the longer run, in our view. Threats: The removal of the MAS’s requirement for FIs wishing to commence lending operations to obtain a credit bureau enquiry beforehand could negatively impact CBA’s business demand. Furthermore, regulators could potentially cease or not renew CBA’s operating licences. The acquisition of CBA’s minority stakes could impede its regional growth strategy.

Figure 34: SWOT Strengths: Opportunities: 1. Resilient business model through economic cycles 1. The commencement of operations in Myanmar is a 2. Highly cash generative, and is likely to maintain its key near-term growth catalyst. We expect the growth net cash position after funding capex needs trajectory of MMCB to be broadly similar to CBC, and 3. Monopolistic stronghold of its operations in project break even in 2-3 years Singapore, Cambodia, and soon, Myanmar, underpin its 2. The onstream of digital banking licenses in stable earnings track record Singapore. Financial inclusion from these virtual players should bold well for greater credit demand in the long run Weakness: Threats: 1. Increased oversight by regulatory authorities are 1. The removal of MAS's requirement for FI's wishing to likely to increase compliance costs in the near term commence lending operations to obtain a credit bureau 2. Execution risks in penetrating its new target market, enquiry beforehand could negatively affect CBA's latent Myanmar business demand 3. Cybersecurity risk - IT-related capex to remain as 2. The acquisition of CBA's minority stake could impede recurring costs for CBA its regional growth strategy

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

APPENDICES

Figure 35: CBA’s management team as at 16 Mar 2021

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

Figure 36: CBA’s group structure as at 26 Nov 2020

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, PROSPECTUS

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

BY THE NUMBERS

P/BV vs ROE 12-mth Fwd FD Core P/E vs FD Core EPS 6.400 24.00% 29.00 Growth 41.0% 6.300 23.50% 28.50 35.2% 6.200 23.00% 28.00 29.3% 6.100 22.50% 27.50 23.5% 6.000 22.00% 27.00 17.7% 5.900 21.50% 26.50 11.8% 5.800 21.00% 26.00 6.0% Jan-17AJan-18AJan-19AJan-20AJan-21FJan-22F Jan-17A Jan-18A Jan-19A Jan-20A Jan-21F Jan-22F

Rolling P/BV (x) (lhs) ROE (rhs) 12-mth Fwd Rolling FD Core P/E (x) (lhs) FD Core EPS Growth (rhs)

Profit & Loss

(S$m) Dec-19A Dec-20A Dec-21F Dec-22F Dec-23F Total Net Revenues 41.44 46.05 48.67 53.01 57.43 Gross Profit 41.44 46.05 48.67 53.01 57.43 Operating EBITDA 22.11 24.06 27.96 30.02 32.26 Depreciation And Amortisation (4.28) (4.08) (4.16) (4.27) (4.49) Operating EBIT 17.83 19.98 23.80 25.75 27.76 Financial Income/(Expense) 0.05 (0.10) 0.10 0.10 0.10 Pretax Income/(Loss) from Assoc. 1.14 0.86 1.04 1.24 1.49 Non-Operating Income/(Expense) 0.00 0.00 0.00 0.00 0.00 Profit Before Tax (pre-EI) 19.03 20.75 24.94 27.10 29.36 Exceptional Items 0.36 1.37 0.00 0.00 0.00 Pre-tax Profit 19.39 22.12 24.94 27.10 29.36 Taxation (3.16) (3.12) (3.75) (4.08) (4.42) Exceptional Income - post-tax Profit After Tax 16.23 19.00 21.19 23.02 24.94 Minority Interests (8.85) (10.79) (11.65) (12.66) (13.72) Preferred Dividends FX Gain/(Loss) - post tax Other Adjustments - post-tax Net Profit 7.38 8.20 9.53 10.36 11.22 Recurring Net Profit 7.08 7.03 9.53 10.36 11.22

Fully Diluted Recurring Net Profit 7.08 7.03 9.53 10.36 11.22

Cash Flow

(S$m) Dec-19A Dec-20A Dec-21F Dec-22F Dec-23F EBITDA 22.11 24.06 27.96 30.02 32.26 Cash Flow from Invt. & Assoc. Change In Working Capital (0.24) (0.70) 0.88 (1.00) 0.88 (Incr)/Decr in Total Provisions Other Non-Cash (Income)/Expense Other Operating Cashflow (0.02) (1.15) 0.00 0.00 0.00 Net Interest (Paid)/Received 0.33 0.09 0.10 0.10 0.10 Tax Paid (2.41) (1.72) (3.75) (4.08) (4.42) Cashflow From Operations 19.77 20.58 25.19 25.04 28.82 Capex (3.35) (1.42) (6.80) (4.30) (5.50) Disposals Of FAs/subsidiaries Acq. Of Subsidiaries/investments Other Investing Cashflow (3.33) 2.67 0.00 0.00 0.00 Cash Flow From Investing (6.67) 1.24 (6.80) (4.30) (5.50) Debt Raised/(repaid) Proceeds From Issue Of Shares 0.00 26.97 0.00 0.00 0.00 Shares Repurchased Dividends Paid (5.90) (23.62) (19.07) (20.72) (22.45) Preferred Dividends Other Financing Cashflow 7.17 (3.98) 0.00 0.00 0.00 Cash Flow From Financing 1.27 (0.63) (19.07) (20.72) (22.45) Total Cash Generated 14.36 21.19 (0.68) 0.02 0.88 Free Cashflow To Equity 13.09 21.82 18.38 20.74 23.32

Free Cashflow To Firm 13.09 21.83 18.38 20.74 23.32 SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

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BY THE NUMBERS… cont’d

Balance Sheet

(S$m) Dec-19A Dec-20A Dec-21F Dec-22F Dec-23F Total Cash And Equivalents 34.64 54.68 54.00 54.02 54.89 Total Debtors 4.89 5.54 3.72 6.39 4.57 Inventories Total Other Current Assets 1.62 1.52 1.52 1.52 1.52 Total Current Assets 41.15 61.73 59.24 61.92 60.98 Fixed Assets 1.74 1.95 5.01 5.73 6.40 Total Investments 4.91 5.97 7.01 8.25 9.75 Intangible Assets 10.12 10.83 10.88 10.91 10.91 Total Other Non-Current Assets 4.47 3.78 3.31 2.60 2.94 Total Non-current Assets 21.24 22.53 26.22 27.50 30.00 Short-term Debt 0.00 0.64 0.64 0.64 0.64 Current Portion of Long-Term Debt Total Creditors 4.60 4.43 3.50 5.16 4.23 Other Current Liabilities 26.58 18.90 18.90 18.90 18.90 Total Current Liabilities 31.18 23.97 23.04 24.70 23.76 Total Long-term Debt Hybrid Debt - Debt Component Total Other Non-Current Liabilities 2.14 1.34 1.34 1.34 1.34 Total Non-current Liabilities 2.14 1.34 1.34 1.34 1.34 Total Provisions 0.12 0.38 0.38 0.38 0.38 Total Liabilities 33.44 25.69 24.76 26.42 25.48 Shareholders' Equity 15.74 43.62 44.57 45.60 46.73 Minority Interests 13.21 14.96 16.13 17.39 18.76

Total Equity 28.95 58.58 60.69 63.00 65.49

Key Ratios

Dec-19A Dec-20A Dec-21F Dec-22F Dec-23F Revenue Growth N/A 6.8% 11.3% 9.2% 8.4% Operating EBITDA Growth N/A 8.8% 16.2% 7.4% 7.5% Operating EBITDA Margin 54.4% 55.5% 57.9% 57.0% 56.5% Net Cash Per Share (S$) 0.17 0.27 0.26 0.26 0.27 BVPS (S$) 0.08 0.21 0.22 0.22 0.23 Gross Interest Cover 64.64 98.93 N/A N/A N/A Effective Tax Rate 16.3% 14.1% 15.0% 15.0% 15.0% Net Dividend Payout Ratio 104% 108% 90% 90% 90% Accounts Receivables Days N/A 43.98 35.00 35.00 35.00 Inventory Days N/A N/A N/A N/A N/A Accounts Payables Days N/A N/A N/A N/A N/A ROIC (%) N/A (240%) 8380% 1257% 899% ROCE (%) N/A 45.3% 39.4% 41.1% 42.7%

Return On Average Assets N/A 24.2% 24.8% 26.2% 27.5%

Key Drivers

Dec-19A Dec-20A Dec-21F Dec-22F Dec-23F FI Data Business (% yoy) 7.2% 4.7% 9.5% 8.0% 7.0% Non FI Data Business (% yoy) 10.2% 8.2% 12.5% 10.0% 9.3%

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

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CGS-CIMB India or its associates, may: (a) from time to time, have long or short position in, and buy or sell the securities of the subject company in this research report; or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the subject company in this research report or act as an advisor or lender/borrower to such company or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions. CGS-CIMB India, its associates and the analyst engaged in preparation of this research report have not received any compensation for investment banking, merchant banking or brokerage services from the subject company mentioned in the research report in the past 12 months. 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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

any prescribed exemptions. Recipients of this report are to contact CGS-CIMB Research Pte Ltd, 50 Raffles Place, #16-02 Singapore Land Tower, Singapore in respect of any matters arising from, or in connection with this report. CGS-CIMBR has no obligation to update its opinion or the information in this research report. This publication is strictly confidential and is for private circulation only. If you have not been sent this report by CGS-CIMBR directly, you may not rely, use or disclose to anyone else this report or its contents. If the recipient of this research report is not an accredited investor, expert investor or institutional investor, CGS-CIMBR accepts legal responsibility for the contents of the report without any disclaimer limiting or otherwise curtailing such legal responsibility. If the recipient is an accredited investor, expert investor or institutional investor, the recipient is deemed to acknowledge that CGS-CIMBR is exempt from certain requirements under the FAA and its attendant regulations, and as such, is exempt from complying with the following: (a) Section 25 of the FAA (obligation to disclose product information); (b) Section 27 (duty not to make recommendation with respect to any investment product without having a reasonable basis where you may be reasonably expected to rely on the recommendation) of the FAA; (c) MAS Notice on Information to Clients and Product Information Disclosure [Notice No. FAA-N03]; (d) MAS Notice on Recommendation on Investment Products [Notice No. FAA-N16]; (e) Section 36 (obligation on disclosure of interest in specified products), and (f) any other laws, regulations, notices, directive, guidelines, circulars and practice notes which are relates to the above, to the extent permitted by applicable laws, as may be amended from time to time, and any other laws, regulations, notices, directive, guidelines, circulars, and practice notes as we may notify you from time to time. In addition, the recipient who is an accredited investor, expert investor or institutional investor acknowledges that as CGS-CIMBR is exempt from Section 27 of the FAA, the recipient will also not be able to file a civil claim against CGS-CIMBR for any loss or damage arising from the recipient’s reliance on any recommendation made by CGS-CIMBR which would otherwise be a right that is available to the recipient under Section 27 of the FAA, the recipient will also not be able to file a civil claim against CGS-CIMBR for any loss or damage arising from the recipient’s reliance on any recommendation made by CGS-CIMBR which would otherwise be a right that is available to the recipient under Section 27 of the FAA. CGS-CIMBR, its affiliates and related corporations, their directors, associates, connected parties and/or employees may own or have positions in specified products of the company(ies) covered in this research report or any specified products related thereto and may from time to time add to or dispose of, or may be materially interested in, any such specified products. Further, CGS-CIMBR, its affiliates and its related corporations do and seek to do business with the company(ies) covered in this research report and may from time to time act as market maker or have assumed an underwriting commitment in specified products of such company(ies), may sell them to or buy them from customers on a principal basis and may also perform or seek to perform significant investment banking, advisory, underwriting or placement services for or relating to such company(ies) as well as solicit such investment, advisory or other services from any entity mentioned in this report. As of March 16, 2021, CGS-CIMBR does not have a proprietary position in the recommended specified products in this report. CGS-CIMBR does not make a market on the securities mentioned in the report.

South Korea: This report is issued and distributed in South Korea by CGS-CIMB Securities (Hong Kong) Limited, Korea Branch (“CGS-CIMB Korea”) which is licensed as a cash equity broker, and regulated by the Financial Services Commission and Financial Supervisory Service of Korea. In South Korea, this report is for distribution only to professional investors under Article 9(5) of the Financial Investment Services and Capital Market Act of Korea (“FSCMA”). Spain: This document is a research report and it is addressed to institutional investors only. The research report is of a general nature and not personalised and does not constitute investment advice so, as the case may be, the recipient must seek proper advice before adopting any investment decision. This document does not constitute a public offering of securities. CGS-CIMB is not registered with the Spanish Comision Nacional del Mercado de Valores to provide investment services. Sweden: This report contains only marketing information and has not been approved by the Swedish Financial Supervisory Authority. The distribution of this report is not an offer to sell to any person in Sweden or a solicitation to any person in Sweden to buy any instruments described herein and may not be forwarded to the public in Sweden. Switzerland: This report has not been prepared in accordance with the recognized self-regulatory minimal standards for research reports of banks issued by the Swiss Bankers’ Association (Directives on the Independence of Financial Research). Thailand: This report is issued and distributed by CGS-CIMB Securities (Thailand) Co. Ltd. (“CGS-CIMB Thailand”) based upon sources believed to be reliable (but their accuracy, completeness or correctness is not guaranteed). The statements or expressions of opinion herein were arrived at after due and careful consideration for use as information for investment. Such opinions are subject to change without notice and CGS-CIMB Thailand has no obligation to update its opinion or the information in this research report. CGS-CIMB Thailand may act or acts as Market Maker, and issuer and offerer of Derivative Warrants and Structured Note which may have the following securities as its underlying securities. Investors should carefully read and study the details of the derivative warrants in the prospectus before making investment decisions. AAV, ADVANC, AEONTS, AMATA, AOT, AWC, BANPU, BBL, BCH, BCP, BCPG, BDMS, BEC, BEM, BGC, BGRIM, BH, BJC, BPP, BTS, CBG, CENTEL, CHG, CK, CKP, COM7, CPALL, CPF, CPN, DELTA, DTAC, EA, EGCO, EPG, ERW, ESSO, GFPT, GLOBAL, GPSC, GULF, GUNKUL, HANA, HMPRO, INTUCH, IRPC, IVL, JAS, JMT, KBANK, KCE, KKP, KTB, KTC, LH, MAJOR, MBK, MEGA, MINT, MTC, ORI, OSP, PLANB, PRM, PSH, PSL, PTG, PTT, PTTEP, PTTGC, QH, RATCH, RS, SAWAD, SCB, SCC, SGP, SPALI, SPRC, STA, STEC, STPI, SUPER, TASCO, TCAP, THAI, THANI, THG, TISCO, TKN, TMB, TOA, TOP, TPIPP, TQM, TRUE, TTW, TU, VGI, WHA, BEAUTY, JMART, LPN, SISB, WORK. Corporate Governance Report: The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the Market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The

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result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may be changed after that date. CGS-CIMB Thailand does not confirm nor certify the accuracy of such survey result.

Score Range: 90 - 100 80 – 89 70 - 79 Below 70 or No Survey Result Description: Excellent Very Good Good N/A

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United Kingdom and European Economic Area (EEA): In the United Kingdom and European Economic Area, this material is also being distributed by CGS-CIMB Securities (UK) Limited (“CGS-CIMB UK”). CGS-CIMB UK is authorized and regulated by the Financial Conduct Authority and its registered office is at 53 New Broad Street, London EC2M 1JJ. The material distributed by CGS-CIMB UK has been prepared in accordance with CGS-CIMB’s policies for managing conflicts of interest arising as a result of publication and distribution of this material. This material is for distribution only to, and is solely directed at, selected persons on the basis that those persons: (a) are eligible counterparties and professional clients of CGS-CIMB UK; (b) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Order”), (c) fall within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Order; (d) are outside the United Kingdom subject to relevant regulation in each jurisdiction, material(all such persons together being referred to as “relevant persons”). This material is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this material relates is available only to relevant persons and will be engaged in only with relevant persons. 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Ltd, CGS-CIMB Securities (Hong Kong) Limited and CGS-CIMB Securities (India) Private Limited, and is distributed solely to persons who qualify as “U.S. Institutional Investors” as defined in Rule 15a-6 under the Securities and Exchange Act of 1934. This communication is only for Institutional Investors whose ordinary business activities involve investing in shares, bonds, and associated securities and/or derivative securities and who have professional experience in such investments. Any person who is not a U.S. Institutional Investor or Major Institutional Investor must not rely on this communication. The delivery of this research report to any person in the United States of America is not a recommendation to effect any transactions in the securities discussed herein, or an endorsement of any opinion expressed herein. CGS-CIMB Securities (USA) Inc, is a FINRA/SIPC member and takes responsibility for the content of this report. For further information or to place an order in any of the above-mentioned securities please contact a registered representative of CGS-CIMB Securities (USA) Inc. CGS-CIMB Securities (USA) Inc. does not make a market on other securities mentioned in the report. CGS-CIMB Securities (USA) Inc. has not managed or co-managed a public offering of any of the securities mentioned in the past 12 months. CGS-CIMB Securities (USA) Inc. has received compensation for investment banking services from Credit Bureau Asia Ltd in the past 12 months. CGS-CIMB Securities (USA) Inc. neither expects to receive nor intends to seek compensation for investment banking services from any of the company mentioned within the next 3 months. United States Third-Party Disclaimer: If this report is distributed in the United States of America by Raymond James & Associates, Inc (“RJA”), this report is third-party research prepared for and distributed in the United States of America by RJA pursuant to an arrangement between RJA and CGS-CIMB Securities International Pte. Ltd. (“CGS-CIMB”). CGS-CIMB is not an affiliate of RJA. This report is distributed solely to persons who qualify as “U.S. Institutional Investors” or as “Major U.S. Institutional Investors” as defined in Rule 15a-6 under the Securities and Exchange Act of 1934, as amended. This communication is only for U.S. Institutional Investors or Major U.S. Institutional Investor whose ordinary business activities involve investing in shares, bonds, and associated securities and/or derivative securities and who have professional experience in such investments. Any person who is not a U.S. Institutional Investor or Major U.S. Institutional Investor must not rely on this communication. The delivery of this report to any person in the U.S. is not a recommendation to effect any transactions in the securities discussed herein, or an endorsement of any opinion expressed herein. If you are receiving this report in the U.S from RJA, a FINRA/SIPC member, it takes responsibility for the content of this report. For further information or to place an order in any of the above-mentioned securities please contact a registered representative of CGS-CIMB Securities (USA) Inc. or RJA. https://raymondjames.com/InternationalEquityDisclosures Other jurisdictions: In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is only for distribution to professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions. Distribution of stock ratings and investment banking clients for quarter ended on 31 December 2020 688 companies under coverage for quarter ended on 31 December 2020 Rating Distribution (%) Investment Banking clients (%) Add 67.0% 0.9% Hold 21.7% 0.0% Reduce 11.3% 0.3%

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Financial Services - Others │ Singapore Credit Bureau Asia Ltd │ March 16, 2021

Spitzer Chart for stock being researched ( 2 year data )

Credit Bureau Asia Ltd (CBA SP) Price Close 1.60 1.50 1.40 1.30 1.20 1.10 1.00 0.90 0.80 Dec-20 Dec-20 Jan-21 Jan-21 Feb-21 Mar-21

Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (Thai IOD) in 2020, Anti-Corruption 2020 ADVANC – Excellent, Certified, AEONTS – Good, n/a, AH – Very Good, n/a, AMATA – Excellent, Declared, ANAN – Excellent, Declared, AOT – Excellent, n/a, AP – Excellent, Certified, ASP – Very Good, Certified, AU – Good, n/a, BAM – not available, n/a, BANPU – Excellent, Certified, BAY – Excellent, Certified, BBL – Very Good, Certified, BCH – Good, Certified, BCP - Excellent, Certified, BCPG – Excellent, Certified, BDMS – Very Good, n/a, BEAUTY – Good, n/a, BEC – Very Good, n/a, BEM – Excellent, n/a, BGRIM – Very Good, Certified, BH - Good, n/a, BJC – Very Good, n/a, BJCHI – Very Good, Certified, BLA – Very Good, Certified, BPP – Very Good, Certified, BR - Good, n/a, BTS - Excellent, Certified, CBG – Very Good, n/a, CCET – Good, n/a, CENTEL – Very Good, Certified, CHAYO - Good, n/a, CHG – Very Good, n/a, CK – Excellent, n/a, COL – Excellent, Certified, CPALL – Excellent, Certified, CPF – Excellent, Certified, CPN - Excellent, Certified, CPNREIT – not available, n/a, CRC – not available, n/a, DELTA - Excellent, Certified, DEMCO – Excellent, Certified, DDD – Very Good, Declared, DIF – not available, n/a, DOHOME – not available, n/a, DREIT – not available, n/a, DTAC – Excellent, Certified, EA – Excellent, Declared, ECL – Very Good, Certified, EGCO - Excellent, Certified, EPG – Very Good, n/a, ERW – Very Good, Declared, GFPT - Excellent, Certified, GGC – Excellent, Certified, GLOBAL – Very Good, n/a, GPSC – Excellent, Certified, GULF – Very Good, n/a, GUNKUL – Excellent, Certified, HANA - Excellent, Certified, HMPRO - Excellent, Certified, HUMAN – Good, n/a, ICHI – Excellent, Certified, III – Excellent, n/a, INTUCH - Excellent, Certified, IRPC – Excellent, Certified, ITD – Very Good, n/a, IVL - Excellent, Certified, JASIF – not available, n/a, JKN – Excellent, Declared, KBANK - Excellent, Certified, KCE - Excellent, Certified, KEX – not available, n/a, KKP – Excellent, Certified, KSL – Excellent, Certified, KTB - Excellent, Certified, KTC – Excellent, Certified, LH - Excellent, n/a, LPN – Excellent, Certified, M – Very Good, Certified, MACO – Very Good, n/a, MAJOR – Very Good, Declared, MAKRO – Excellent, Certified, MALEE – Excellent, Certified, MC – Excellent, Certified, MEGA – Very Good, n/a, MINT - Excellent, Certified, MTC – Excellent, Certified, NETBAY – Very Good, n/a, NRF – not available, n/a, OSP – Very Good, n/a, PLANB – Excellent, Certified, PLAT – Very Good, Certified, PRINC – Very Good, Certified, PR9 – Excellent, n/a, PSH – Excellent, Certified, PSTC – Very Good, Certified, PTT - Excellent, Certified, PTTEP - Excellent, Certified, PTTGC - Excellent, Certified, PTTOR – not available, n/a, QH – Excellent, Certified, RATCH – Excellent, Certified, RBF – not available, n/a, RS – Excellent, n/a, RSP – not available, n/a, S – Excellent, n/a, SAK – not available, n/a, SAPPE – Very Good, Declared, SAT – Excellent, Certified, SAWAD – Very Good, n/a, SC – Excellent, Certified, SCB - Excellent, Certified, SCC – Excellent, Certified, SCGP – not available, n/a, SCN – Excellent, Certified, SF – Good, n/a, SHR – not available, n/a, SIRI – Very Good, Certified, SPA - Good, n/a, SPALI - Excellent, n/a, SPRC – Excellent, Certified, SSP - Good, Declared, STA – Very Good, Certified, STEC – Excellent, n/a, SVI – Excellent, Certified, TASCO – Excellent, Certified, TCAP – Excellent, Certified, THANI – Excellent, Certified, THCOM – Excellent, Certified, TIPCO – Very Good, Certified, TISCO - Excellent, Certified, TKN – Very Good, n/a, TMB - Excellent, Certified, TNR – Very Good, Certified, TOP - Excellent, Certified, TPCH – Good, n/a, TPIPP – not available, n/a, TRUE – Excellent, Certified, TU – Excellent, Certified, TVO – Excellent, Certified, UNIQ – not available, n/a, VGI – Excellent, Certified, WHA – Excellent, Certified, WHART – not available, n/a, WICE – Excellent, Certified, WORK – Good, n/a. 1 CG Score 2020 from Thai Institute of Directors Association (IOD) 2 AGM Level 2019 from Thai Investors Association 3 Companies participating in Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC) under Thai Institute of Directors (as of June 24, 2019) are categorised into: companies that have declared their intention to join CAC, and companies certified by CAC. 4 The Stock Exchange of Thailand : the record of listed companies with corporate sustainable development "Thai sustainability Investment 2019" included: SET and mai listed companies passed the assessment conducted by the Stock Exchange of Thailand: THSI (SET) and THSI (mai) SET listed companies passed the assessment conducted by the Dow Jones Sustainability Indices (DJSI) xx

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Recommendation Framework Stock Ratings Definition: Add The stock’s total return is expected to exceed 10% over the next 12 months. Hold The stock’s total return is expected to be between 0% and positive 10% over the next 12 months. Reduce The stock’s total return is expected to fall below 0% or more over the next 12 months. The total expected return of a stock is defined as the sum of the: (i) percentage difference between the target price and the current price and (ii) the forward net dividend yields of the stock. Stock price targets have an investment horizon of 12 months.

Sector Ratings Definition: Overweight An Overweight rating means stocks in the sector have, on a market cap-weighted basis, a positive absolute recommendation. Neutral A Neutral rating means stocks in the sector have, on a market cap-weighted basis, a neutral absolute recommendation. Underweight An Underweight rating means stocks in the sector have, on a market cap-weighted basis, a negative absolute recommendation.

Country Ratings Definition: Overweight An Overweight rating means investors should be positioned with an above-market weight in this country relative to benchmark. Neutral A Neutral rating means investors should be positioned with a neutral weight in this country relative to benchmark. Underweight An Underweight rating means investors should be positioned with a below-market weight in this country relative to benchmark.

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