Company Background

The Company was incorporated in Malaysia under the Companies Act 1965 on 9 April 2001 as a private limited company under the name of Alfaville (M) Sdn Bhd and is deemed registered under the Act. The company changed its name to ITMAX System Sdn Bhd on 26 October 2001. On 29 June 2022, the Company was converted into a public limited company. The Company is principally involved in the business of supply and installation and provision of public space networked systems and investment holding while the sole subsidiary, STS is principally involved in the R&D on systems and application software, design and assembly of controllers, supply and installation of the networked traffic management system, and providing leased and managed services of video surveillance and analytics systems.

Use of proceeds

1. Smart city application expansion to other local governments, federal ministries, and existing customers - 41.7% (within 36 months)
2. Expansion of R&D capabilities - 6.1% (within 36 months)
3. Expansion into enterprise market - 9.8% (within 36 months)
4. Network and telecommunication infrastructure expansion - 19.4% (within 36 months)
5. Working capital - 14.3% (within 12 months)
6. Repayment of borrowings - 3.9% (within 6 months)
7. Defray fees and expenses relating to the IPO and the Listing - 14.4% (within 6 months)

Smart city application expansion to other local governments, federal ministries, and existing customers - 41.7% (within 36 months)

As part of the geographical expansion plans to other states and territories within Malaysia, the investment plans will focus on the purchase of equipment and devices as well as installation, testing and commissioning work. The company plans to invest in the following type of public space networked systems, infrastructure, resources and related facilities:

In this respect, the company intends to use approximately RM85.0 million of the proceeds from the Public Issue for the following.

Expansion of R&D capabilities - 6.1% (within 36 months)

The company intends to use approximately RM12.5 million of the proceeds from the Public Issue to expand its R&D capabilities in the following manner:

Expansion into enterprise market - 9.8% (within 36 months)

The company intends to use approximately RM20.0 million of the proceeds from the Public Issue to expand into new enterprise market by leveraging on the core competencies in networked systems to address opportunities in townships, malls and office towers, hospitals and healthcare facilities covering public and private spaces to grow the business. The company also plans to extend its expertise to highways mainly for the networked street lighting and video surveillance systems.

In this respect, the company plans to set up a centralized control centre and related facilities to cater to this new segment within 36 months from the date of the Listing and the breakdown for the estimated cost to set up these facilities is as follows:

Network and telecommunication infrastructure expansion - 19.4% (within 36 months)

The company intends to use approximately RM39.5 million of the proceeds from the Public Issue to expand the network and telecommunication infrastructure and connectivity within 36 months from the date of the Listing to cater for business expansion and growth by investing, as follows:

Working capital - 14.3% (within 12 months)

The company intends to use approximately RM29.1 million of the proceeds from the Public Issue to supplement the working capital requirements of the Group which includes the purchase of inventory for the ongoing projects, as follows.

Repayment of borrowings - 3.9% (within 6 months)

The company intends to use approximately RM8.0 million of the proceeds from the Public Issue to repay the entire outstanding amount owing in respect of a revolving credit facility granted by Hong Leong Bank Berhad with three (3)-year revolving tenure which was drawn down in September 2021 for the purchase of network equipment (“RCF”). As at the LPD, the total amount outstanding of the RCF is approximately RM8.2 million. The repayment of the RCF is expected to have a positive financial impact on the Group with interest savings of approximately RM485,000 per annum based on the effective rate of approximately 5.95%.

Business model

The business model is as follows:

The company is a provider of public space networked systems focusing on lighting, video surveillance and traffic management, as well as communications network services. Public space mainly refers to the space that is generally accessible to the public such as roads and parks. Public space is mostly under the jurisdiction of Federal, State or local governments.

The business model is based on the following two key segments with corresponding revenue streams:

1. Supply and installation of networked systems including networked lighting systems, networked traffic management systems, and other related systems.
2. Provision of networked facilities, mainly in the form of leasing of networked video surveillance facilities and communications networks.

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