Maybank IB has assigned a below average for ITMAX’ ESG practices with an overall score of 41 (out of 100). ITMAX scored just above average in the quantitative assessment, average in qualitative, but poorly in ESG target-setting.
However, the house said it notes that sustainability disclosures for ITMAX remain limited owing to its relatively recent listing. As such, its proprietary score has the potential to improve as more ESG metrics are disclosed moving forward. BUY call and MYR2.65 TP, based on 1.5x PEG, are unchanged.
“E”: Tracking emissions should be prioritised
ITMAX scored below average in its “E” metrics as it lags its software peers in carbon emissions tracking (Scope 1/2/3). This is partially mitigated by its efficient use of electricity and water (measured on a unitary basis), which displayed a declining trend YoY in FY22 despite a 32% increase in employee headcount. Providing waste management metrics/data could
also help improve its future “E” score.
“S”: Strong proponent of gender diversity
ITMAX scores well in gender diversity metrics. Although women make up the minority (30%) in its workforce, female representation increased YoY both in absolute terms (24% in FY21), and as a proportion of new hires (33% vs. 16% in FY21). This diversity extends to Board representation, whereby women account for 50% of all members – well above the MCCG recommendation of 30%. Employee retention has also trended downward, with a 7ppt reduction YoY in the turnover rate to just 15% in FY22.
“G”: Hampered by lack of comparability
At face value, ITMAX scores well in governance-related indicators, but Maybank said it is unable to assign it an above average score due to the unavailability of prior years’ data for certain metrics assessed. In FY22, independent directors made-up 50% of the Board, with the Non-Executive Chairman also being an independent. Both CEO and Board salary are also at reasonably low levels relative to industry peers.
