MORNING CALL:15/12/23

HLIB thinks SMRT is the smart choice

Transcript

00:00 We end the week with SMRT Holdings after HLIB walked away from a recent briefing feeling

00:06 reassured about its robust prospects.

00:08 It is keeping both its buy call and RM1.38 target price on the IoT provider.

00:14 So its new managed sites increased by 1.13k to 22.5k in the first quarter of FY24, thanks

00:21 to encouraging new site deployments in Malaysia and Indonesian markets, which both registered

00:26 quarter-on-quarter growths according to management.

00:29 Looking ahead, management anticipates a sustained increase in the number of new sites over the

00:33 next two quarters, anchored by PLN and TNB, as utility companies spend the bulk of their

00:38 capex towards the year-end.

00:40 To recap, SMRT successfully entered four regions - Lampung, Nusa Tenggara Timor, Jawa Barat

00:45 and Kalimantan Timor & Utara - after securing PLN as a customer in the fourth quarter of

00:51 the calendar year of 2022.

00:53 SMRT also secured its maiden contract from Aislango, marking its foray into the water

00:58 segment.

00:59 It is worth noting that the water segment is likely to generate a higher revenue per

01:03 site compared to the power and financial services sectors over the same contract period due

01:07 to the larger scope of work.

01:10 SMRT is also expanding.

01:12 It has recently established a wholly-owned subsidiary in the Philippines as part of its

01:15 strategic initiative to expand into the country's utility and financial services sectors.

01:21 According to Bloomberg Data, HLIV is the only house that covers SMRT, so based on its RM1.38

01:26 target price, this implies a possible upside of just a touch over 40% from its last close

01:31 of 98 cent.

01:33 [Music]