3 days ago
- Automotive
- New Straits Times
ITMAX surges with Selangor wins, Johor strength — Rakuten Trade stays bullish
KUALA LUMPUR: Rakuten Trade Sdn Bhd is maintaining its BUY call on ITMAX System Bhd with a target price of RM5.01, citing the company's rapid market expansion, robust order book, and solid earnings visibility as catalysts for sustained growth.
The valuation is based on a discounted cash flow model with an 8.2 per cent weighted average cost of capital and a 3 per cent terminal growth rate.
The broking projects core net earnings of RM85.1 million for the financial year 2025 (FY2025) and RM101.4 million for FY2026, underpinned by what it calls "one of the most compelling urban digitalisation plays in Malaysia."
Key growth drivers include rapid contract wins in Selangor, entrenched leadership in Johor, recurring income streams from long-term concessions, and a record RM1.598 billion unbilled order book, backed by a net cash balance sheet.
ITMAX has entered Selangor's smart city landscape in force, securing two landmark contracts for the Selangor Intelligent Parking (SIP) system from Subang Jaya City Council (MBSJ) and Shah Alam City Council (MBSA) – marking its first major foothold in Malaysia's most urbanised state.
The MBSJ award covers 73,000 gazetted bays (33,000 already operational, 40,000 undergoing upgrades) with AI-enabled enforcement using Mobile Patrol LPR and CCTV. Shortly after, the MBSA win added 80,000 bays (50,000 operational) to ITMAX's portfolio. In total, the company now manages about 100,000 parking bays in Selangor, far surpassing the 60,000 it operates in Johor.
Through its 70 per cent-owned subsidiary Selmax, ITMAX will enjoy a 50 per cent revenue share from parking and compound collections while providing infrastructure, maintenance, and enforcement manpower. With Phase 1 of the SIP covering MBSJ, MBSA, MPS, and MBPJ – and the latter two councils yet to appoint operators – ITMAX is well-positioned to capture further contracts. Phase 2, slated for after end-2025, could expand coverage to Selangor's total addressable market of 330,000–400,000 bays.
Rakuten Trade notes that this parking network could form the backbone for broader Smart City integration, including video surveillance and centralised urban management systems – creating multi-layered recurring revenue streams.
In Johor, ITMAX's proven model has driven strong results – a recent rollout in Kulai boosted council parking revenues by 200 per cent, reinforcing its leadership across seven councils. The latest win, a RM145 million, 20-year smart traffic light system concession from Johor Bahru City Council (MBJB), will modernise 230 junctions, with billing expected from the fourth quarter of FY2025 through the first quarter of FY2026.
Johor Bahru's steady urban expansion is projected to increase junctions by about 5 per cent annually, while CCTV demand could surge from the current 500 units to around 34,000, highlighting significant untapped growth potential.
With high-value contract momentum in Selangor, entrenched market share in Johor, and a scalable technology platform aligned with state smart city agendas, ITMAX is positioned for long-term growth. Rakuten Trade said the combination of policy-backed concessions, a record order book, and a strong cash position makes ITMAX a standout in Malaysia's infrastructure digitalisation sector.
