PETALING JAYA: ITMax System Bhd
is likely to win more contracts for installing and managing closed-circuit television (CCTV) surveillance systems in smaller Johor towns like Kluang and Muar, says Hong Leong Investment Bank (HLIB) Research.
Currently, the group, via its 65%-owned subsidiary Southmax, has six council awards for CCTV contracts in Johor.
The latest is a letter of acceptance (LoA) from Majlis Perbandaran Batu Pahat (MPBP) for the provision of CCTV valued at RM50.9mil.
Under the arrangement, MPBP is expected to install approximately 200 units equipped with 15 artificial intelligence features, with full deployment targeted within the next six months.
The LoA also includes the provision and management of the existing five smart traffic lights in the region; the remaining junctions will be awarded once the current vendor’s contract expires.
The research house stated that the market broadly anticipated the latest award.
“Looking ahead, we believe the group is well-positioned to progressively secure additional councils, especially given Johor’s push for a single system policy,” HLIB Research said in a report.
It has secured CCTV contracts for Johor Baru, Iskandar Puteri, Pasir Gudang, Pengerang, Kulai and Batu Pahat, and the group expects additional wins from smaller towns such as Kluang and Muar.
Beyond new council awards, HLIB Research said ITMAX’s management highlighted that deployment within existing secured councils continues to expand.
For instance, it noted that Johor Baru initially rolled out 500 units but has since requested a scale-up to support the development of smart city infrastructure for the Johor-Singapore Special Economic Zone.
Notably, Johor Baru’s own study indicates a requirement for approximately 34,000 units compared to the 500 currently installed.
The research house maintained a “buy” call on the stock with an RM5.71 target price based on a discounted cash flow valuation using a 7% discount rate and a terminal growth rate of 3%.
“Our terminal growth assumption reflects the long runway for CCTV deployment across Malaysia, supported by national digitalisation and smart city initiatives.”
To put this into perspective, ITMAX’s current rollout of 10,000 CCTV units for Dewan Bandaraya Kuala Lumpur is dwarfed by Singapore’s 90,000 – with Singapore targeting 200,000 units by 2030.
“Over time, the research house expects ITMAX to monetise its infrastructure further through smart city applications, such as digital twins, traffic impact assessments and analytics, cementing its role as a key enabler of urban digital transformation.
ITMAX’s net profit rose to RM23.07mil in the second quarter ended June 30, 2025, from RM19.16mil in the previous corresponding period, driven by stronger contributions from its digital infrastructure solutions segment.
Furthermore, revenue grew to RM58.46mil from RM53.25mil a year earlier, spurred by higher earnings from video surveillance, analytics, and subscription services.
