KUALA LUMPUR: SMRT Holdings Bhd
's foray into the Philippines' financial services market via an ATM infrastructure management contract could set the group up to further capitalise on the growing number of ATMs in the region.
In addition, the venture could serve as a stepping stone for SMRT to establish a track record in the Philippines market before expanding into the utilities sector.
Hong Leong Investment Bank (HLIB) Research said this would not be a first for SMRT, which has had similar success in Indonesia.
In that market, the group secured Indonesian national utility company PT Perusahaan Listrik (PLN) as a client five years after initially contracting with ATMi, the largest independent ATM operator in Indonesia.
HLIB noted that there is demand for SMRT's Internet of Things (IoT) solutions in the Philippines utility sector, which faces similar challenges to that of Indonesia.
"However, unlike Malaysia and Indonesia, where state-owned entities dominate, the Philippines features a multitude of privately-owned utility companies.
"For a start, the group will target smaller-scale utility companies, and aims to gradually enter the larger utility market by leveraging on its proven track record," said the research firm.
HLIB maintained its "buy" recommendation on SMRT with an unchanged target price of RM1.38.
SMRT's contract from Pito AxM Platform Inc, which owns about 3,000 ATMs in the Philippines, entails the deployment of its Managed ATM Infrastructure Solution in the region.
Accordingly, SMRT will fully manage the network infrastructure at all the ATM sites to be installed with relevant specifications stipulated as Priority (Wireless) Support.
The project will be for a duration of three years for each site designated by Pito AxM, starting from the installation date at each site.
According to HLIB, the scope of work for this project will mirror that of ATMi, which, notably, shares a parent company with Pito AxM.
