PETALING JAYA: ITMax System Bhd
's recent contract win in Penang opens new avenues for it to secure more CCTV contracts in the coming years, which will strengthen the company's recurring income streams and technological leadership.
With the latest contract, the company has a total unbilled order book of RM1.5bil, to be recognised progressively up to July 2039, said Hong Leong Investment Bank (HLIB) Research. At the end of third quarter 2024, Itmax’s tender book stood at about RM300-400mil.
The research house maintained a “buy” call for the stock with an unchanged target price of RM4.71 a share.
Last month, Itmax secured a second contract in Penang, worth RM11.8mil to upgrade and maintain 513 CCTVs for Majlis Bandaraya Pulau Pinang (MBPP) from Jan 13, 2025 to Sept 12, 2030. The contract includes a nine-month upgrading timeline and a five-year maintenance period.
Under this second contract, Itmax will leverage on the existing infrastructure and communicating networks, resulting in minimal capital expenditure requirement, HLIB said.
In Aug 2, 2024, Itmax was awarded the first contract by MBPP for the installation of 48 new AI-powered CCTVs and smart integrated operations centre. The contract reinforces Itmax’s presence in Penang’s smart city transformation, leveraging existing infrastructure to minimise costs and integrating AI features, it added.
With Penang still in the early stage of its smart city transformation, this new contract provides Itmax with a strategic foothold to offer its full range smart city and AI solutions, said HLIB.
Based on estimates, Penang Island alone would require approximately 10,000 CCTVs to achieve full coverage, presenting a significant growth opportunity for Itmax.
Additionally, Itmax has unique direct exposure to the AI theme, especially at the application level.
HLIB believes the home-grown smart city integrated system and solution provider is a compelling case given its multi-year growth potential on the back of solid order and tender books.
