Itmax System Bhd

• ITMAX may extend it upward trajectory after it surged to all time high yesterday to break out from its threeweeks bullish rectangular pattern. With the stock pulling further away from all the EMAs coupled with the supportive technical reading in RSI along with a gradual rise in trading volume, likely indicating the return of buying interest.

• We expect the rising momentum is set to steer the stock to trend higher and test the next level of resistance of RM2.50 (R1), followed by RM2.75 (R2).

• On the downside, stop-loss is set at RM2.02, below the 14 Feb’s low.

• ITMAX recently announced that its subsidiary has secured a RM77m contract from the Kulai Municipal Council (MPKu). The contract entails the provision of video surveillance and traffic light system services, encompassing a smart command center, a closed-circuit camera system with artificial intelligence features, and traffic light systems on a monthly subscription basis in the MPKu area for a duration of 15 years. The contract will boost ITMAX’s unbilled order book to a record high of RM958.5m. We perceive this contract win positively as it is earnings accretive.

Source: Rakuten Research - 19 Mar 2024

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