Sarawak Water Project Execution Set To Accelerate -- CIMB Securities

KUALA LUMPUR, Oct 13 (Bernama) -- Water project execution in Sarawak is expected to accelerate due to the streamlined governance structure following the consolidation of the state’s water agencies.

CIMB Securities said this would facilitate faster execution of the Sarawak Water Master Plan, which targets 100 per cent water coverage by 2030. This compares with about 71 per cent currently in rural areas, and entails more than RM20 billion of cumulative investment, including RM1.1 billion for replacing 2,740 kilometres of ageing pipelines.

“With the merger now completed and Sarawak Water Sdn Bhd moving into the implementation phase, we believe the streamlined governance structure should facilitate faster execution of the Sarawak Water Master Plan,” the brokerage said in a note.

CIMB Securities said Sarawak Budget 2027 has allocated RM892 million to strengthen water supply infrastructure, up 10 per cent year-on-year and representing about six per cent of the total state budget. The allocation comprises RM183 million for the Sarawak Water Supply Grid, RM255 million for the water pipeline replacement programme under alternative funding and RM454 million for water supply facilities, including treatment plant expansions and upgrades across the state.

It said Sarawak’s overall water coverage currently stands at 86.1 per cent, compared with the national average of 94.7 per cent.

“We view the higher water infrastructure allocation positively for Insights Analytics Bhd (IAB), as it underscores Sarawak’s continued commitment to upgrading and digitalising its water network. Anchored by its strong incumbency in the state, IAB has built a more than two-decade track record through longstanding collaboration with the Rural Water Supply Department (JBALB) and Sarawak Water Sdn Bhd,” it added.

CIMB Securities said IAB’s proprietary IntelliWater System has been deployed and remains in use by JBALB since 2021, supported by annually renewed maintenance contracts, while its digital mapping module installed for Sibu Water Board in 2022 is compatible with the consolidated Sarawak Water system.

“We believe this combination of local track record, proprietary technology, existing system deployments and longstanding agency relationships provides IAB with a meaningful competitive advantage in upcoming tenders.

“Together with its recent project wins, we believe IAB is well positioned to capture opportunities across non-revenue water reduction, water network digitalisation, treatment plant upgrades and pipeline infrastructure as Sarawak’s multi-year water investment cycle gathers pace,” it added.

CIMB Securities said it has maintained its “buy” rating on IAB with an unchanged target price of RM1.80 and made no changes to its core earnings per share estimates for the financial years 2026 to 2028.

-- BERNAMA