PETALING JAYA: ITMax System Bhd
’s earnings are expected to be supported by expansion opportunities in Sabah and Sarawak, increasing revenue from the smart parking segment and new contracts from Johor and Penang.
UOB Kay Hian (UOBKH) Research said there is a potential positive surprise in Kota Kinabalu for the digital infrastructure service provider.
The research house said according to mayor Datuk Seri Sabin Samitah, a total of 1,500 CCTV cameras will be installed in strategic areas across Kota Kinabalu city under the first phase, starting in 2025.
The mayor has also shared that the CCTVs, equipped with artificial intelligence (AI), will be connected to a command centre operated by Kota Kinabalu City Hall in partnership with other enforcement agencies to enhance monitoring.
“We believe ITMAX stands a high chance of being awarded this contract, as it has the highest AI accuracy of 85% to 90% compared with its peers.
“Additionally, it is one of the few licensed network facilities providers granted approval by the Malaysian Communications and Multimedia Commission to build fibre optic infrastructure,” the research house said in a report.
Moreover, its smart parking solutions, which the group started last year in Johor, is expected to ramp up this year. The research house said the revenue contribution from this segment was minimal in 2024, as ITMAX was setting up the enforcement solution (that is the CCTVs mounted on motor bikes and enforcers).
It was also due to the fact that physical parking coupons can still be used in 2024.
“Nevertheless, we expect the utilisation rate of the smart parking system to increase significantly starting from 2025 as physical coupons have been phased out since Jan 25, and the enforcement system is now fully operational,” the research house said.
In terms of smart parking contracts, UOBKH Research said ITMAX had won a series of smart parking contracts in Johor recently, and this momentum is expected to grow with the group estimating a potential total of 200,000 to 300,000 parking spaces in Johor.
Assuming the group secures 250,000 spaces, with a 70% revenue-sharing model between Southmax Sdn Bhd (SSB) and the local council, and ITMAX holding 65% of SSB, the maximum revenue potential from this could reach RM85.18mil, the research house noted. It maintained a “buy” call on the stock with an unchanged target price of RM4.30. Shares of ITMAX were last traded at RM3.80 on Monday.
