KUALA LUMPUR: ITMax System Bhd ‘s first contract for the provision of a smart parking system could pave the way for more jobs in this area and propel the group’s earnings to the next level, says Hong Leong Investment Bank (HLIB) Research.
Itmax announced yesterday it had bagged a contract with Iskandar Puteri City Council to be a smart parking operator for 32,025 street parking bays for a period of 15 years commencing June 1, 2024.
HLIB’s back-of-the-envelope calculation projects a total revenue collection of RM1.8mil per month or RM21mil per year from the operations.
Based on revenue sharing of 70% for Itmax and 30% for the city council, this would garner RM14.7mil revenue for Itmax per year.
Assuming a 50% margin, this could lift Itmax’s bottom line by RM7.5mil-8mil per year.
However, there are bigger benefits to be reaped given significant opportunity for the group to expand its smart parking services to the other 15 councils, said HLIB.
Assuming a total of 200,000 parking bays in the greater Johor area, with six days parking operations at four hours per day (40% utilisation rate) and 60 sen per hour, this would garner average RM11.5mil monthly or RM138.2mil per year.
“With the same term of 70%-30% revenue sharing and 50% margin, this could lift up the group bottom line by RM48mil per year,” it said.
HLIB reiterated its “buy” call on Itmax with an unchanged target price of RM2.90.
“We believe that this home-grown smart city integrated system and solution provider is a compelling case given its multi-year growth potential on the back of solid order and tender books,” it added.