Quick Takeaways
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Strong BUY Call: Maybank IB reiterates a BUY rating for ITMAX System Bhd, maintaining a price target of RM4.50, driven by robust earnings visibility in smart city infrastructure and a promising AI growth segment.
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CCTV Expansion: ITMAX has secured contracts for 1,640 CCTV units in Johor and anticipates further contracts, with 2,000 installations projected for FY2025 and FY2026, potentially boosting core earnings significantly.
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Growth Outside Johor: ITMAX is involved in expanding surveillance projects in Kuala Lumpur and Kota Kinabalu, with substantial installations planned, indicating strong momentum beyond Johor.
- Digital Twin Initiative: The new AI-powered "Digital Twin" project aims to create a 3D model of Kuala Lumpur for urban planning, expected to generate recurring revenue of RM15 million to RM20 million annually starting in FY2026.
Solid Growth in Johor
ITMAX System Bhd is gaining attention, especially in Johor. Maybank Investment Bank Bhd expressed confidence in the company, maintaining a BUY call with a price target of RM4.50. This positive outlook highlights ITMAX’s strong earnings and pivotal role in smart city infrastructure. Currently, ITMAX has secured contracts for 1,640 CCTV units across four districts in the Iskandar Malaysia region. Moreover, discussions are ongoing for additional installations in Pengerang, Batu Pahat, and Muar. Notably, analysts view ITMAX’s expansion in Johor as inevitable, identifying a growing market for surveillance technology.
The forecast for CCTV installations in Johor anticipates 2,000 units for FY2025 and FY2026. Analysts suggest that adding another 1,000 units could boost core earnings by 2.4% to 3.6%. In addition to the advancements in Johor, plans for Kuala Lumpur signal further growth. The city aims to deploy 20,000 CCTV units by the end of 2028, resulting in at least 10,000 more installations in the next few years. ITMAX is also working on a 1,500-unit network in Kota Kinabalu, emphasizing its growing influence across Malaysia.
Innovative Steps with Digital Twins
ITMAX is not stopping at surveillance. The company’s new “Digital Twin” project aims to create a virtual 3D model of Kuala Lumpur. This initiative will provide real-time simulations, enhancing urban planning and decision-making. Analysts anticipate the project’s completion by December 2025, with monetization expected to start in FY2026. They estimate potential annual recurring revenue between RM15 million and RM20 million, driven by ITMAX’s robust data analytics capabilities.
With a market capitalisation of RM3.8 billion and shares trading at RM3.70, ITMAX stands out as Maybank IB’s top software selection. Its strong fundamentals, strategic contracts, and innovative AI roadmap position the company well in the rapidly evolving smart city infrastructure space. These developments promise to enhance the quality of life for residents while setting a benchmark for future urban advancements.
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