KUALA LUMPUR: Hong Leong Investment Bank (HLIB) is confident that ITMAX System Bhd, which won its first smart parking job yesterday, would be able to expand its smart parking service to another 15 districts in Johor.
The company's 65 per cent-owned subsidiary Southmax Sdn Bhd has been appointed by Majlis Bandaraya Iskandar Puteri (MBIP) to be the smart parking operator of 32,025 street parking bays for a period of 15 years commencing from 1 June 2024 to 31 May 2039.
Revenue sharing at the rate of 70 per cent (Southmax) and 30 per cent (MBIP) based on cash reloads will be made by the public via the Parkmax@Johor application.
Based on the revenue sharing rate, HLIB said the contract would garner RM14.7 million per annum for ITMAX and with 50 per cent margin assumption, this could lift its bottom line by RM7.5 million to RM8 million per year.
"Note that, the street parking will still be operating along on coupon basis until the end of the year. The coupon system will slowly be phased out and be replaced solely with the smart parking app via Parkmax@Johor," the firm said in a research note today.
HLIB added that the revenue generated from the smart parking system will provide additional recurring income for the group.
The research house said it remained upbeat and this development strengthens its belief that this will propel ITMAX's earnings to the next level.
"This is one of the first job win relating to smart parking solution and we are confident that the group would be able to expand its reach to another 15 districts in Johor," it said in a research note today.
According to 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 per cent utilisation rate) and 60 sen per hour, this would garner average RM11.5 million monthly or RM138.2 million per year. "With the same term of 70 per cent to 30 per cent revenue sharing and 50 per cent margin, this could lift up the group bottom line by RM48 million per year," said HLIB.
The firm has maintained a "buy" call on ITMAX with unchanged target price of RM2.90.