ITMAX System Bhd (ITMAX) has won a 15-year smart parking contract outside the Greater Johor Bahru (JB) area. The contract, awarded by the Tangkak District Council (MDT), covers 5,113 street parking bays in Tangkak starting from 1 September 2024 to 31 August 2039. The contract has lifted ITMAX's presence in Johor following reports that its AI-powered CCTV infrastructure played a crucial role in resolving a recent abduction case of a young girl in the southern state.
The contract is the first smart parking contract outside of JB for ITMAX. This new appointment adds to the company's portfolio, which already includes the management of 41,112 street parking bays.
ITMAX's performance in the Johor market has been impressive and its smart parking contract momentum seems to accelerate.
The company's BUY rating and target price of MYR4.25 remain unchanged. Analysts have maintained their earnings forecasts for FY24-26E, reflecting the incorporation of smart parking contracts into ITMAX's financial model.
The revenue-sharing model for the Tangkak contract follows a 70:30 split between ITMAX's subsidiary Southmax Sdn Bhd (SSB) and MDT for all proceeds collected via the Parkmax@Johor app. The smart parking sector remains largely untapped in Johor, with around 200,000 outdoor parking bays available. ITMAX estimates that securing every 50,000 parking bays could potentially generate MYR22.7 million annually, assuming a conservative 40% daily utilisation rate.
In terms of environmental, social, and governance (ESG) practices, ITMAX has seen a notable improvement. The company's overall ESG 2.0 score has increased to 66/100 from a previous score of 41/100. This enhancement is attributed to the establishment and achievement of clear social and corporate governance targets in FY23.
