CITAGLB: A Contrarian Gem in Asia's Energy Transition

The share price of Citaglobal Berhad (KLSE:CITAGLB) has stumbled in recent months, down 29.65% year-to-date as of mid-2025 amid market volatility. Yet beneath the surface, the company is quietly building a compelling case for long-term value. This article argues that CITAGLB's improving fundamentals—rising profitability, strategic acquisitions, and emerging opportunities in green energy—are being overlooked by a market fixated on short-term swings. For investors willing to look past the noise, this presents a contrarian opportunity.

The Disconnect Between Fundamentals and Price

The most striking aspect of Citaglobal's recent performance is the stark contrast between its financial recovery and its underperforming stock.

Earnings Turnaround: After posting a RM0.17 loss per share (LPS) in 2022, Citaglobal rebounded to an EPS of RM0.023 in 2023 and RM0.035 in 2024—a 52% year-on-year jump. Q1 2025 results show further progress, with EPS rising 40% to RM0.007. This recovery is underpinned by robust revenue growth, which surged 123% to RM205.66 million in 2023 and another 41% to RM291.67 million in 2024.

Strategic Acquisitions: The company has been aggressively expanding its footprint. In 2023, it acquired a 25% stake in WZS Powergen Sdn Bhd, bolstering its energy portfolio. By 2024, it had added stakes in Ifactors Sdn Bhd (25%) and Nova Reeco Sdn Bhd (40%), signaling a push into new markets. These moves align with Citaglobal's broader pivot toward renewable energy, a sector poised for explosive growth across Asia.

Contrarian Catalysts: Insider Confidence and Emerging Markets

Two factors suggest the market's pessimism is misplaced.

1. Insider Activity Signals Optimism

Major shareholders have been buying. In late June 2025, Tiza Global Sdn Bhd and its director, Tan Sri Dato' Sri Dr Mohamad Norza, executed significant transactions. While disposing of 6.03 million shares at RM0.85 on June 25, they also reacquired the same volume at the same price—a move suggesting confidence in the stock's valuation. Combined with smaller purchases at lower prices (e.g., RM0.808 on June 25), this activity signals insider belief in Citaglobal's long-term prospects.

2. Untapped Growth in Azerbaijan's Green Energy Boom

Citaglobal's most promising opportunity lies in Azerbaijan, where it is spearheading the country's first commercial solar-BESS hybrid project. Partnering with the Port of Baku, the firm's Tiza Green Energy joint venture is developing a 5.4 MW solar facility paired with a Battery Energy Storage System (BESS). This project, supported by a 21-year power purchase agreement (PPA), is the first step toward the port's goal of net-zero emissions by 2035.

The project's significance extends beyond Azerbaijan. By integrating solar and BESS technology, Citaglobal is positioning itself to capitalize on the Trans-Caspian Green Energy Corridor—a regional initiative aimed at linking Asia and Europe through renewable power. With Azerbaijan targeting 43% renewable capacity by 2035, this partnership could serve as a template for similar projects across Central Asia.

Risks and Considerations

No investment is without risks. Citaglobal's small market cap (RM338 million) makes it susceptible to liquidity constraints and speculative trading. The stock's beta of -0.33 suggests low volatility relative to the market, but its 52-week trading range (RM0.65–RM1.14) reveals sharp swings. Investors must also monitor geopolitical risks in markets like Kyrgyzstan and Azerbaijan.

The Case for a Long-Term Bet

The key to CITAGLB's valuation lies in its ability to leverage green energy demand in emerging markets. With a debt/equity ratio of just 22.4%, the firm is financially stable to pursue growth. Meanwhile, its dividend yield of 1.26%—modest but consistent—is a positive sign for income-focused investors.

The disconnect between Citaglobal's improving fundamentals and its depressed share price (RM0.80 as of mid-2025) creates a compelling entry point. While short-term traders may focus on near-term volatility, the company's strategic moves and emerging market opportunities suggest the stock is primed for a revaluation.

Investment Recommendation

Buy for the long term: Investors with a 3–5-year horizon should consider accumulating shares at current levels. The stock's valuation—trading at a P/E of roughly 33x 2024 EPS—appears reasonable given its growth trajectory.

Hold for income: The dividend, while small, offers a modest yield.

Avoid if short-term focused: The stock's liquidity and volatility make it less suitable for traders seeking quick gains.

In conclusion, Citaglobal Berhad is a classic contrarian play. Its stumble in a volatile market has created an opportunity to buy into a company with strong fundamentals, strategic momentum, and a foothold in Asia's green energy revolution. For investors willing to look beyond the noise, CITAGLB could be a hidden gem poised for growth.