KUALA LUMPUR: ITMAX System Bhd’s recurring income base is set to expand further, underpinned by key initiatives with Kuala Lumpur City Hall (DBKL), the Johor state government, Selangor smart parking and the upcoming digital twin platform, said Hong Leong Investment Bank Bhd (HLIB).
ITMAX posted its best-ever quarterly earnings in the second quarter of financial year 2025, with recurring income now accounting for 71 per cent of revenue in the first half of the year, compared with 50 per cent in the same period last year.
Notably, 98 per cent of this recurring income was contributed by the group’s closed-circuit television (CCTV), smart parking, and underground utilities mapping segments.
HLIB said DBKL’s mandate to scale up its CCTV network to 20,000 units by 2028 presents strong growth potential from the current base of 10,000 units.
“While no fixed timeline has been provided, management anticipates the additional 10,000 units
to be deployed gradually over 2026-2027, aligning with the one-year installation period required to meet the 2028 target.
“Notably, ITMAX’s established fibre optic infrastructure and high artificial intelligence accuracy of up to 95 per cent, reinforce its first-mover advantage in securing DBKL’s CCTV contracts,” it said.
Meanwhile, HLIB said a study in Johor Bahru points to demand for about 34,000 CCTV units compared with the roughly 500 installed to date.
Separately, the firm said the upcoming launch of the digital twin platform next year marks a strategic step towards data monetisation, broadening ITMAX’s recurring revenue streams.
“Adopting a platform-as-a-service model, this will generate monthly subscription fees similar to the CCTV business. Beyond 3D city visualisation, the system integrates multiple council functions, enabling real-time simulation.
“The digital twin platform not only complements ITMAX’s smart city infrastructure but also marks its maiden step in monetising data. Margins are expected to mirror the high levels of the CCTV business,” it said.
HLIB reiterated its “Buy” rating on ITMAX with a target price of RM5.71.
The firm’s terminal growth assumption reflects the long runway for CCTV deployment across Malaysia, supported by the national digitalisation and smart city initiatives.
“Over time, we also expect ITMAX to monetise its infrastructure further through smart city applications, such as digital twins, traffic impact assessments and analytics, cementing its role as a key enabler of urban digital transformation,” it added.
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