ITMAX has a lot to gain from latest RM105mil DBKL contract

PETALING JAYA: ITMax System Bhd’s latest contract win, worth RM105.3mil from the Kuala Lumpur City Hall (DBKL), bodes well for its future prospects.

According to Hong Leong Investment Bank (HLIB) Research, the deal would provide longer visibility of recurring income stream to the service and network facilities provider. In addition, the win would serve as a testament to ITMAX’s technological leadership and quality of service, the brokerage said.

Reiterating “buy” on ITMAX, HLIB Research maintained its target price for the counter at RM2.90.

“We believe that this home-grown smart city integrated system and solution provider is a compelling case given its multi-year growth potential on the back of solid order and tender books,” it said.

With this new contract, ITMAX’s total unbilled order book would be worth RM1.1bil, which would be recognised progressively up to May 2039. As end-2023, ITMAX’s tender book stood at around RM500mil.

ITMAX last Friday announced it had been awarded a variation order (VO) worth RM105.3mil from DBKL, which included an extension of the company’s contract to provide closed-circuit televisions (CCTVs) and video messaging signage (VMS) for the integrated transport information system (Itis) in the Klang Valley.

The first phase of the CCTV and VMS Itis contract was originally set to conclude by 2026. However, via the extension under the VO, ITMAX will continue to provide its services for another 33 months starting Jan 1, 2027 to Sept 30, 2029.

HLIB Research noted there would likely be more orders coming from DBKL for ITMAX.

“We strongly believe that DBKL will soon resume its tradition of adding 1,000 CCTVs per year after this contract period alignment exercise which ease future contract negotiations and implementation process,” it said.Maybank Investment Bank (MaybankIB) Research said the VO was a welcomed development. Maintaining its “buy” call on ITMAX, with an unchanged target price of RM2.65, the brokerage said it viewed the VO award by DBKL positively, as it would lay the groundwork for future VOs to expand CCTV coverage in the Klang Valley.

Maybank IB Research noted that under DBKL’s Smart City Plan 2021-2025, CCTVs were seen as integral to data collection and analysis in ensuring optimal administrative decision-making.

“Given ITMAX’s strong execution track record, we opine it is well-positioned to capitalise moving forward,” it said.

It projected that ITMAX would potentially add around 1,000 CCTV units per year between 2024 and 2026 to the existing DBKL network of 5,000 CCTVs.

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