PETALING JAYA: ITMax System Bhd
’s prospects continue to improve as it has further solidified its presence in Johor’s smart parking sector.
Hong Leong Investment Bank (HLIB) Research noted that ITMAX’s latest job win – its sixth contract in Johor – will drive the company’s earnings to a new level.
“We remain upbeat (about ITMAX) and this development strengthens our belief that this will propel its earnings to the next level,” the research house wrote in its report yesterday.
It reiterated its “buy” call on ITMAX, with an unchanged target price of RM4.71, pegged to 45 times forward earnings.
ITMAX’s 65%-owned subsidiary, Southmax Sdn Bhd, recently accepted a letter of appointment from Majlis Perbandaran Pontian to be the smart parking operator for 4,000 to 5,000 street parking spaces.
The contract spans 15 years, commencing on Feb 1, 2025, and ending on Jan 31, 2040.
“With this, we are confident that the group would be able to expand its reach to another 10 districts in Johor.”
Analysing the revenue potential, HLIB Research performed a back-of-the-envelope calculation, assuming a 40% utilisation rate for 10 hours per day (8am to 6pm), translating to four hours per day of usage.
Given six-day parking operations for 4,500 parking bays at a rate of 60 sen per hour, this would generate RM259,000 in monthly revenue, or RM3.1mil annually.
Under the 70%-30% revenue-sharing model, ITMAX would receive RM2.2mil per annum.
Assuming a 50% margin, the contract could contribute around RM1.1mil to ITMAX’s bottom line each year.
“We believe that this home-grown smart city integrated system and solution provider is a compelling case, given its multiyear growth potential on the back of solid order and tender books,” it said.
ITMAX shares declined 0.82% yesterday to close at RM3.63.
