ITMAX System Bhd’s latest RM134 million smart city project in Kota Kinabalu is expected to boost the annual revenue run rate of its supply and installation division, according to Hong Leong Investment Bank Bhd (HLIB).
ITMAX has accepted the notification of approval as the Universal Service Provider for the Kota Kinabalu Smart City Project from the Malaysian Communications and Multimedia Commission (MCMC).
HLIB said the project mainly involves a network operation command centre and around 1,500 closed-circuit television (CCTV) cameras, with supply and installation revenue recognised over the first two years, followed by five years of managed services.
“Beyond the initial contract period, we see scope for ITMAX to secure a longer-term managed services agreement with Kota Kinabalu City Hall (DBKK), potentially spanning 15 to 20 years, upon project completion. Coupled with the recently secured DBKL smart street-lighting contract, this award should lift the annual revenue run rate of ITMAX’s supply and installation division towards about RM80 million to RM100 million, by our estimates,” it said.
HLIB added that ITMAX’s successful expansion into Sabah, Johor and Penang, beyond its traditional Kuala Lumpur City Hall (DBKL) market, reinforces the competitiveness of its smart city solutions.
It noted that Selangor is the next key state to watch, with CCTV contracts potentially coming up for tender in 2027-2028 following the award of SIP Phase 2.
“As the operator of SIP Phase 1, ITMAX has an upper hand in demonstrating the effectiveness of its solutions. More importantly, some CCTVs installed for parking-payment enforcement under Phase 1 could also support broader surveillance functions, giving ITMAX an existing infrastructure base and a potential advantage when bidding for Selangor’s CCTV contract,” it said.
HLIB also flagged Penang as an emerging growth market, after local councils awarded contracts to fully replace around 1,000 existing CCTVs.
Overall, the firm maintained its “Buy” call on ITMAX with an unchanged target price of RM6.00.
“Over time, we also expect ITMAX to further monetise its infrastructure 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.
