CIMB Securities has maintained its BUY call on Insights Analytics Bhd (IAB) with an unchanged target price of RM1.80, following the group’s RM14.4 million subcontract for the Suai Water Treatment Plant in Miri, Sarawak.
In its latest report, the research house said the contract further strengthens IAB’s track record in Sarawak’s water infrastructure rollout and provides another reference project for its Water Technology Solutions (WTS) segment.
IAB announced on Oct 6 that its wholly-owned subsidiary, Insights Analytics Technologies Sdn Bhd, had accepted a letter of award from K J S Capital Sdn Bhd to act as subcontractor for the seven million litres per day (MLD) Suai Water Treatment Plant.
The RM14.4 million fixed-price contract covers the construction, operation and maintenance of the plant under a design, build and operate performance-based arrangement aimed at addressing acute water supply shortages in the Suai area.
IAB’s scope primarily involves upgrading existing water treatment equipment and retrofitting the facility with Internet of Things (IoT)-enabled systems to digitalise plant operations.
Construction is scheduled to run from Oct 13, 2026 to April 10, 2027, followed by a 60-month operation and maintenance period.
CIMB said the award reinforces IAB’s positioning in Sarawak’s efforts to improve water supply reliability while accelerating the digitalisation of water infrastructure.
The research house estimated IAB’s outstanding order book at about RM50 million, while its tender book stands at approximately RM500 million.
With works beginning this month, CIMB expects a modest earnings contribution towards the latter part of IAB’s FY10/26 forecast period, followed by a fuller contribution in 1HFY10/27F.
It expects WTS activity to pick up from FY10/27F after softer project execution in recent quarters, which it attributed to seasonality and potentially slower project rollouts.
CIMB made no changes to its FY26-FY28 earnings per share forecasts as its existing assumptions already incorporate further contract wins.
Its RM1.80 target price is based on an unchanged 18.5 times CY27 forecast price-to-earnings ratio, representing a 20% discount to foreign water technology and smart infrastructure peers.
At an estimated 12.9 times CY27 earnings, CIMB said it continues to favour IAB as a listed proxy for utility digitalisation and Malaysia’s water infrastructure investment cycle, supported by its Sarawak presence, growing water-project track record and expanding recurring O&M exposure.
