At 12.30pm, ITMAX’s share price rose five sen or 2.9% to RM1.80, the highest level since it was listed on the Main Market in December 2022 at an IPO price of RM1.07.
Its trading volume surged to 14.63 million, the second highest since its listing, by the midday break. Its highest volume of shares traded was on Sept 22 with 18.98 million shares, four days after the announcement of winning the contract.
On Sept 18, ITMAX announced its 65%-owned subsidiary Southmax Sdn Bhd (SSB) had secured a 15-year contract for the provision of video surveillance services worth RM105.32 million from MBJB.
Its bullish performance has led Maybank Investment Bank (Maybank IB) to maintain its “buy” call and up its target price (TP) to RM2.10 based on a higher 24.4 times financial year 2024 (FY2024) estimated price-to-earnings ratio (PER).
“The higher premium is justified, underpinned by its niche position as one of the select few domestic providers of AI-enabled closed-circuit television cameras (CCTVs), and strong three-year (FY2022-2025) core net profit compound annual growth rate (CAGR) of 33%,” said Maybank IB in a report today.
Maybank IB is also positive on the group’s contract until 2038, which will cover the provision of 500 CCTVs on a rental model as well as 34 traffic controllers to the district.
The research house is optimistic about its prospects of securing CCTV letters of award (LOAs) for the remaining two town councils, which include Pasir Gudang and Kulai, in due course.
“There is also further scope for LOA awards in the remaining 12 Johor districts,” it added.
On its CCTV rollout, Maybank IB said its recent acquisition of smart parking outfit Aim-Force Software Sdn Bhd is expected to further support the suite of products offered to Johor town councils.
This includes the provision of parking fee collection services utilising AI-enabled CCTV number plate recognition.
Considering the potential expansion of its job scope (beyond CCTV provision) that ITMAX could potentially secure in Johor, Maybank IB raised its earnings estimates by 13% for FY2024 and FY2025.
“This is underpinned by our estimates of an increase in the number of CCTV units installed in Johor for FY2024/2025 and the provision of parking fee collection services,” it said.
On the same note, Hong Leong Investment Bank (HLIB) has re-entered its “buy” call on ITMAX with a higher TP of RM2.08, reflecting the upward earnings revision.
“Our TP is derived from unchanged 25 times price-earnings (PE) multiple of FY2025 earnings per share (EPS) forecast (previously FY2024 EPS forecast).
“We believe that this homegrown smart city integrated system and solutions provider is a compelling case given its multi-year growth potential on the back of solid order and tender books,” it added.
At market close, its share price was up five sen or 2.9% at RM1.80, giving it a market capitalisation of RM1.85 billion.