KUALA LUMPUR (June 29): Water technology and intelligent asset management solutions firm Insights Analytics Bhd’s (IAB) (KL:IAB) core net profit (CNP) is projected to grow 20.4% in the financial year ending April 30, 2027 (FY2027), mainly riding on accelerated water infrastructure roll-out in Sarawak, said CIMB Securities.

"We project CNP to grow 20.4% year-on-year (y-o-y) in FY2027, backed by Sarawak’s accelerated water infrastructure roll-out, potential water-related jobs in Peninsular Malaysia and further monetisation of IAMS, including digital twin offerings," it said in a note on Monday.

The research house reiterated their 'buy' call on IAB, with a target price lowered slightly to RM1.95, based on an unchanged 18.5 calendar year 2027 (CY2027) price-earnings ratio (PER) and in line with the current weighted-average CY2027 PER of foreign peers involved in water technology and smart infrastructure solutions.

“We continue to like its scarcity value as a listed proxy to utility digitalisation, underpinned by a growing order book, strong Sarawak positioning and rising exposure to higher-value digitalisation opportunities,” CIMB said.

Moreover, IAB’s expansion into the power utility space potentially widens its addressable market over time, it added.

IAB's FY2026 core net profit jumped 231% y-o-y to RM43.1 million, driven by a 796% surge in its water technology solutions segment, though margin expansion was capped by that segment's lower profitability. The full-year result met expectations, with core net profit coming in at 98% of the forecasted earnings per share (EPS), said the house.

However, CIMB flagged lower contributions from the intelligent asset management solutions (IAMS) segment in IAB’s 4QFY2026 revenue, reflecting slower new job wins.

Despite this, the house noted that the launch of IAB’s digital twin offerings in partnership with 51WORLD could support longer-term monetisation of the segment.

“As these new digital twin opportunities may require a longer conversion timeline, we now take a more conservative view on the pace of IAMS revenue recognition in the shorter term, through the first half of FY2027,” it said.

Thus, the house cut its FY2027-FY2028 EPS estimates by 9.8% to 10% to reflect more conservative IAMS assumptions.

“This does not change our positive view on IAB’s water-led growth outlook but better reflects near-term uncertainty over the pace of IAMS monetisation,” CIMB added.