Recently, companies associated with "Johor" have shown strong activity in the stock market, particularly following the confirmation of the Sultan of Johor's appointment as the next Yang di-Pertuan Agong. ITMAX System Berhad (ITMAX, 5309), the company awarded a substantial contract by the Johor State Council, has seen an upward trend in its stock price.

According to reports, ITMAX's subsidiary, Southmax Sdn Bhd, secured contracts for video surveillance services from the Johor Bahru City Council (MBJB) and video surveillance with smart traffic light system services from the Iskandar Puteri City Council (MBIP). The combined value of these two contracts is approximately RM216.5 million, with a duration of 15 years (September 2023 to September 2038).

So, what sets ITMAX apart and enables it to secure such significant contracts? In fact, ITMAX is a comprehensive digital infrastructure provider established in 2001, with over 20 years of experience in installing and providing public safety system facilities. Over the years, the company's main client has been the Kuala Lumpur City Hall (DBKL), and it has installed 5,000 Closed Circuit Television (CCTV) surveillance systems in the Kuala Lumpur city area.

As one of Malaysia's top smart city platform providers, ITMAX is also dedicated to delivering tailor-made smart city solutions. These include intelligent traffic management, smart video surveillance, telecommunications infrastructure, and more, designed to meet the unique needs of each city, making urban areas more livable, workable, and ultimately, more prosperous. By the way, ITMAX was listed on the Main Market of Bursa Malaysia on December 13, 2022.

Returning to the MBJB contract, according to investment institutions, ITMAX will install 500 AI-powered CCTVs in Johor Bahru, along with establishing a Smart Command Centre locally. Additionally, to ensure seamless network connectivity, the company will lay underground cables ranging from 60.0 KM to 100.0 KM in length. The total installation cost is estimated to be around RM15.0 million. Once the installation is completed (expected to take 6 to 9 months), the company will charge MBJB a fixed monthly subscription fee.

Regarding the RM111.2 million contract awarded by MBIP, the scope of work is similar to MBJB's. ITMAX is responsible for designing, installing, and maintaining a Smart Command Centre, a closed circuit camera system with artificial intelligence features, and a smart traffic light system within the city of Iskandar Puteri.

However, it's important to note that ITMAX only holds a 65.0% stake in Southmax, the company that secured these two projects. Therefore, when calculating profits, the remaining 35.0% needs to be accounted for separately.

In summary, these two contracts have raised ITMAX's outstanding contracts to approximately RM824.00 million, and the company also holds bidding contracts worth around RM500.0 million. It's worth mentioning that Johor has a total of 16 city councils, so in addition to MBJB and MBIP, other city councils are expected to join in.

Looking ahead, ITMAX is not ruling out further expansion of its business into other solutions such as networked lighting and smart parking. Besides Kuala Lumpur and Johor, the company also plans to expand its market presence to Selangor and Sabah. So, readers, what are your thoughts on ITMAX, which currently has a Price-to-Earnings ratio of approximately 33.38?

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Disclaimer: The above is purely for educational purposes and reflects personal opinions. It does not constitute any buying or selling recommendations.

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