Maybank IB expects ITMAX’s turnover to rise by RM24 million in 2024, 2025
Published on: Tuesday, February 13, 2024
By: Bernama
ITMAX System has secured a three-year street lighting contract extension with Kuala Lumpur City Hall until July 2026, valued at RM52.8 million.
PETALING JAYA: ITMAX System Bhd’s recent Variation Order No. 7 (VO7) contract, secured from Kuala Lumpur City Hall (DBKL) is expected to increase the group’s turnover by approximately RM23.6 million for the fiscal years 2024 to 2025 estimates (FY2024-2025E), said Maybank Investment Bank Bhd (Maybank IB).
In a statement, the research house said the contract came as a positive surprise last week as there had been no prior indication of additional scope of work for the existing contract.
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“We maintained FY2023E earnings, but raised FY2024E and 2025E by 14% and 12%, respectively. Our target price (TP) is also nudged 30 sen higher to RM2.40 (+14%).
“We peg our TP to unchanged 24.4 times FY2024E price-to-earnings ratio (PER), a 20% premium to the simple PER average of its comparable peers,” it said.
Maybank IB also said that it continues to favour the public space networked systems provider for its cost, security, and technical advantages over its peers.
It said the latest VO7 contract secured on Feb 6 will cover the replacement cost of roughly 18,000 street light units that were either broken, malfunctioned, or had expired warranties.
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ITMAX initially secured its first DBKL street lighting contract in July 2016, which lasted for five years, and this contract has been renewed twice, first in August 2021 and again in August 2023.
“The latest extension is for three years, until July 2026, with a contract valued at RM52.8 million,” it said.
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As at 12.29pm, ITMAX’s share price was down by 1 sen or 0.49% at RM2.05, giving it a market capitalisation of 2.12 billion.
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