Maybank Investment Bank Berhad
Date of Report: August 22, 2025
ITMAX System Bhd: Robust Growth, Long-Term Visibility, and Strategic Expansion Drive Up Valuation
Strategic Overview: ITMAX System Bhd Delivers Consistent Growth and Expansion
ITMAX System Bhd, a leading Malaysian provider of video surveillance and analytics services, continues to demonstrate strong operational momentum and strategic execution. The company’s second quarter 2025 (2Q25) results showcased resilient growth, driven by digital infrastructure solutions, even as earnings recognition timelines were prudently revised.
Maybank Investment Bank Berhad maintains a bullish stance on ITMAX, raising the target price to MYR5.10 following a shift to Discounted Cash Flow (DCF) valuation methodology. This adjustment reflects long-term cash flow visibility, supported by ongoing contract wins and robust expansion into Selangor and Johor.
Key Highlights and Analyst Perspective
- 2Q25 Revenue: MYR59m, up 15% quarter-on-quarter and 10% year-on-year for 1H25.
- Core Net Profit: MYR43m for 1H25, a 17% YoY increase, in line with consensus but below initial internal forecasts.
- EBITDA Margin: Expanded by 6.4 percentage points to 62.7% for 1H25.
- Target Price Raised: MYR5.10 (from MYR4.98), reflecting DCF valuation (WACC 7.4%, LTG 3%).
- Valuation: Implied FY26E PE of 48x.
- Maintain BUY: Robust business model with more job wins expected from Selangor and Johor.
Financial Performance Snapshot
| Metric |
2Q25 |
1Q25 |
2Q24 |
YoY Change (%) |
QoQ Change (%) |
| Revenue (MYR m) |
58.5 |
50.7 |
53.2 |
9.8 |
15.2 |
| Core Net Profit (MYR m) |
22.8 |
20.4 |
19.1 |
19.6 |
11.9 |
| EBITDA Margin (%) |
61.5 |
64.2 |
54.8 |
6.7 |
-2.7 |
| Core Net Margin (%) |
39.1 |
40.2 |
35.8 |
3.2 |
-1.2 |
Revenue Breakdown and Segment Analysis
- Digital Infrastructure Solutions: Drove growth with a 67% YoY surge, reaching MYR77m in 1H25.
- Supply, Installation & Maintenance Services: Slowed by 40% YoY, totaling MYR31m in 1H25.
- Product Mix: More favorable, boosting EBITDA margin by 6.4 percentage points.
Updated Forecasts and Valuation Methodology
Maybank has revised FY25E–27E earnings downward by 12–20%, reflecting a more prudent approach to project recognition timelines. The valuation method now relies on DCF, emphasizing visibility into long-term cash flow generation.
| Metric |
FY25E (Revised) |
FY25E (Old) |
% Change |
FY26E (Revised) |
FY26E (Old) |
% Change |
FY27E (Revised) |
FY27E (Old) |
% Change |
| Revenue (MYR m) |
205.1 |
255.1 |
-19.6% |
256.9 |
347.5 |
-26.1% |
289.0 |
373.1 |
-22.5% |
| Core PATMI (MYR m) |
85.8 |
97.1 |
-11.7% |
110.3 |
137.0 |
-19.5% |
125.4 |
144.2 |
-13.0% |
DCF Valuation: Long-Term Value Creation
ITMAX’s DCF-based valuation incorporates its surveillance, traffic systems, and smart parking project LOAs in Johor, KL, and Penang. The model assumes MYR50m annual capex focused on smart parking rollouts and a steady revenue ramp-up from ongoing deployments.
| Year |
Unlevered FCF (MYR m) |
Discounted FCF (MYR m) |
| 2025E |
47.1 |
47.1 |
| 2026E |
69.7 |
64.8 |
| 2027E |
91.9 |
79.5 |
| 2028E |
111.3 |
89.3 |
| 2029E |
130.0 |
96.8 |
| 2030E |
147.3 |
101.6 |
| 2031E |
162.7 |
103.9 |
| 2032E |
178.1 |
105.3 |
| 2033E |
195.1 |
106.8 |
| 2034E |
214.1 |
108.5 |
| 2035E |
314.5 |
147.5 |
| Terminal Value |
6,656.8 |
4,558.6 |
- Enterprise Value: MYR5,609.7m
- Equity Value per Share: MYR5.10
- Outstanding Shares: 1,059.6m
Comprehensive Financials: Income Statement, Balance Sheet, and Cash Flow
| FYE Dec (MYR m) |
FY23A |
FY24A |
FY25E |
FY26E |
FY27E |
| Revenue |
150 |
220 |
205 |
257 |
289 |
| EBITDA |
95 |
122 |
136 |
171 |
194 |
| Core Net Profit |
64 |
80 |
86 |
110 |
125 |
| Core EPS (sen) |
6.2 |
7.7 |
8.3 |
10.7 |
12.2 |
| Core EPS Growth (%) |
47.6 |
24.5 |
7.7 |
28.6 |
13.7 |
| Net DPS (sen) |
1.2 |
1.5 |
1.7 |
2.1 |
2.4 |
| Core P/E (x) |
28.8 |
47.7 |
51.4 |
39.9 |
35.1 |
| P/BV (x) |
5.5 |
9.5 |
9.4 |
7.9 |
6.7 |
| Net Dividend Yield (%) |
0.7 |
0.4 |
0.4 |
0.5 |
0.6 |
| ROAE (%) |
20.3 |
21.7 |
19.7 |
21.5 |
20.7 |
Price and Ownership Metrics
- Share Price (as of report): MYR4.28
- 12-month Price Target: MYR5.10 (+20%)
- 52-week High/Low: MYR4.50 / MYR3.22
- Market Capitalization: MYR4.4B (USD1.0B)
- Issued Shares: 1,028m
- Major Shareholders:
- Sena Holdings Sdn. Bhd. – 53.1%
- Kenanga Investors Bhd. – 4.3%
- Principal Asset Management Bhd. – 2.7%
Strategic Risks and Considerations
Key risks for ITMAX include:
- Non-renewal of existing contracts, especially with DBKL.
- Execution challenges and potential cost overruns in expansion projects.
- Government budget reductions potentially affecting contract continuity.
- Variation orders and competitive threats.
Historical Recommendations and Price Targets
ITMAX has received consistent Buy ratings, with price targets steadily rising as the company delivered sequential growth.
| Date |
Recommendation |
Target Price (MYR) |
| 20 Jun |
Buy |
1.7 |
| 25 Sep |
Buy |
2.1 |
| 13 Feb |
Buy |
2.4 |
| 27 Feb |
Buy |
2.5 |
| 20 Mar |
Buy |
2.7 |
| 19 Aug |
Buy |
4.3 |
| 8 Oct |
Buy |
4.4 |
| 26 Feb |
Buy |
4.6 |
| 25 Mar |
Buy |
4.5 |
| 1 Aug |
Buy |
4.9 |
| 4 Aug |
Buy |
5.0 |
Conclusion: ITMAX System Bhd Positioned for Long-Term Value Creation
ITMAX System Bhd stands out in Malaysia’s technology sector for its robust execution, innovative digital infrastructure solutions, and strategic expansion. While earnings recognition has been prudently recalibrated, the company’s business model, strong margins, and potential for further contract wins make it a compelling investment case. With Maybank Investment Bank Berhad’s continued BUY recommendation and a raised target price of MYR5.10, ITMAX is favorably positioned for sustained growth and long-term value creation.
Contact Information
For further inquiries or investment services, readers can reach out to Maybank Investment Bank Berhad or its regional offices located throughout Malaysia, Singapore, London, Hong Kong, Indonesia, India, Philippines, Thailand, and Vietnam.
