From left: CGS International Securities Malaysia (CGS MY) board member Tan Sri Shahril Ridza Ridzuan, CEO Azizah Mohd Yatim, Securities Commission Malaysia MD Datin Azalina Adham, China Galaxy Securities VP and chief informantion officer Luo Liming, Deputy Finance Minister Lim Hui Ying, CGS International group CEO Carol Fong, Bursa Malaysia CEO Datuk Muhamad Umar Swift, Ikhlas Capital chairman Tan Sri Nazir Razak and CGS MY board member Khairy Jamaluddin (Photos by Patrick Goh/The Edge)

KUALA LUMPUR (April 23): Following its demerger from CIMB Group Holdings Bhd, CGS International Securities Malaysia (CGS Malaysia) is aiming for a compound annual growth rate (CAGR) of about 15% to 20% in revenue over the next three to five years.

While the equity segment will continue to be the main contributor to its revenue, CGS Malaysia chief executive officer Azizah Mohd Yatim said the company has also diversified from relying solely on brokerage income.

"With all these different sources of income, it shows that we are no longer a traditional stockbroking house.

“So we have already moved forward and that is the reason we now have all the licences for our corporate finance business, asset management, futures and equity derivatives. These are [businesses] that will hopefully enhance our revenue," she told a press conference on Tuesday.

 

CGS Malaysia CEO Azizah Mohd Yatim said the company has also diversified from relying solely on brokerage income.

CGS Malaysia deputy CEO Alan Inn Wei Loon noted that the company's annual revenue currently stands at about RM250 million. With the targeted CAGR, he expects the company to hit revenue of over RM300 million within the next two years.

Besides its diversification into corporate finance and wealth solutions, Inn said the company also has plans in the pipeline to grow its private equity (PE) and venture capital (VC) business.

For instance, Inn pointed out that CGS International had signed a letter of intent with Malaysia's Ministry of Economy at the KL20 Summit 2024 on Monday to establish a new fund that would be investing in the Malaysian startup ecosystem.

"Our intention is to start a new fund to focus on the VC and PE space in Southeast Asia, and Malaysia would be one of the markets that we are looking at. We actually find that with our parentage now, and with what is happening globally as well as Southeast Asia being a new growth area in the midst of all the geopolitical tension, we find that there's a lot of opportunity in direct investment, specifically in the PE space," he said.

CGS Malaysia deputy CEO Alan Inn Wei Loon said the company also has plans in the pipeline to grow its private equity and venture capital business.

"There has been quite a number of investments that have come in from China into certain parts of the sectors that we see in Malaysia, and the VC and PE space will help bridge the two markets together.

"We find that Malaysia [is] very significant in Southeast Asia, and also between Malaysia and China, both are actually very large trading partners of one another. So we will play the conduit, and we will capitalise on our VC and PE space to generate investments for our clients as well as [benefit] both ... Malaysia and China," Inn added.

CGS Malaysia unveiled its new brand and proposition for the company following the acquisition of the entire stake in CGS-CIMB Securities (Malaysia) by China Galaxy Securities from CIMB Group on Dec 29, 2023.

CGS International Holdings Ltd (CGI) is a subsidiary of China Galaxy Securities, which in turn is a subsidiary of Central Huijin Investment Co Ltd, whose sole shareholder China Investment Corporation is the largest sovereign wealth fund in the world by assets under management.

The acquisition is expected to enhance CGI's networks in China and Asean, specifically in Malaysia, Indonesia, Singapore and Thailand, and is also expected to provide CGS Malaysia with greater connection with regional clients and investment opportunities.

CGS Malaysia currently offers equities trading, leveraged products, wealth management, investment banking, equities research, Shariah-compliant financing, fixed income, currency and commodities, structured products and prime brokerage services in over 15 countries.