Hong Leong Investment Bank Bhd (HLIB) maintained its BUY call on ITMAX System Bhd with an unchanged target price of RM6.00, implying 26.3% capital upside, after the technology company secured a RM120 million contract from Kuala Lumpur City Hall (DBKL) for a smart street lighting system.
HLIB said the six-year contract covers the supply, installation and maintenance of the system, with work commencing once DBKL issues the relevant Work Order Letter. The award replaces ITMAX’s previous contract which began in 2016 before being extended in 2021 and 2023 and expiring on July 31.
The research house said the latest win lifts ITMAX’s unbilled orderbook for the division to RM172 million from RM72 million in 1QFY25, while total group unbilled orderbook is estimated at a record RM2.3 billion. Assuming the new contract is recognised evenly, it could generate about RM20 million in annual revenue over six years.
HLIB expects further contract wins to shape earnings growth from FY27, including several thousand CCTV units across greater Johor following the installation of around 1,500 units. Kota Kinabalu has also called for CCTV tenders while the next phase of DBKL’s CCTV rollout could emerge in 2027.
Beyond CCTV, HLIB sees digital twins as another scalable growth avenue, with ITMAX also finalising pricing for a DBKL digital twin contract. The research house reiterated its BUY call and RM6 target price based on DCF valuation.
As of 11 am, the stock price gained 0.21% to RM4.76.
