PETALING JAYA: Sarawak’s RM892mil allocation for water infrastructure under Budget 2027 could open up opportunities for Insights Analytics Bhd
(IAB), as the state steps up efforts to expand water coverage and modernise its distribution network.
CIMB Research said IAB is well positioned to benefit from the increased spending, given its more than two-decade track record of collaboration with the Rural Water Supply Department (JBALB) and Sarawak Water Sdn Bhd.
The research firm added that IAB is currently the sole non-revenue water technology provider in Sarawak, with its established presence and portfolio of reference projects, including the Suai Water Treatment Plant and Betong Regional Water Supply Grid, supporting its prospects of securing future contracts.
IAB’s proprietary IntelliWater System has been used by JBALB since 2021, supported by annually renewed maintenance contracts, while its digital mapping module, installed for the Sibu Water Board in 2022, is compatible with the consolidated Sarawak Water system.
“This provides IAB with an established operational footprint and familiarity with the state’s existing water infrastructure,” CIMB Research said.
Under Sarawak Budget 2027, the state government has allocated RM14.8bil in total expenditure, comprising RM5.7bil for operating expenditure and RM9.1bil to the Development Fund Account.
Of the development allocation, RM892mil, up 10% year-on-year and equivalent to about 6% of the total state budget, has been earmarked to strengthen water supply infrastructure.
This comprises RM183mil for the Sarawak Water Supply Grid, RM255mil for the water pipeline replacement programme under alternative funding, and RM454mil for water supply facilities, including water treatment plant expansions and upgrades across the state.
CIMB Research expects water project implementation to accelerate following a period of slower execution during the consolidation of Sarawak’s water agencies, which partly contributed to the moderation in IAB’s Water Technology Solutions revenue between financial year 2022 (FY22) and FY25.
“With the merger completed and Sarawak Water Sdn Bhd moving into the implementation phase, we believe the streamlined governance structure should facilitate faster implementation of the Sarawak Water Master Plan,” the research firm said.
The plan targets 100% water coverage by 2030, compared with about 71% currently in rural areas, and entails more than RM20bil in cumulative investment, including RM1.1bil to replace 2,740km of ageing pipelines.
IAB’s near-total revenue exposure to Sarawak, which accounted for about 100% of its revenue over the past few years, positions the group to benefit from the state’s multi-year water infrastructure investment programme.
Its Water Technology Solutions segment contributed 83.9% of total revenue in the 15 months financial year ended October 2026.
CIMB Research maintained its FY26 to FY28 core earnings per share estimates and “buy” recommendation, with an unchanged target price of RM1.80 based on 18.5 times 2027 forecast price-to-earnings ratio.
