KUALA LUMPUR, 19 January 2026 — SMRT Holdings Bhd saw its shares tumble to a near three-year low on Monday after analysts downgraded the stock amid expectations of a significant revenue decline from a key customer, Tenaga Nasional Bhd, a development that rattled investors and sent trading volumes surging.
The stock plunged as much as 65 per cent to 15.5 sen in early trade, levels last seen in 2023, before recovering slightly to around 20 sen at 11.15 am, giving the company a market value of about RM91.1 million. Intraday short selling was temporarily suspended after the steep fall and is set to resume early Tuesday morning.
Analyst Downgrade Triggers Sharp Sell-Off
Hong Leong Investment Bank (HLIB) downgraded SMRT from “buy” to “sell”, citing an “unexpected earnings reset” after management guidance that deployment activity tied to Tenaga’s SCADA (Supervisory Control and Data Acquisition) projects will slow materially in the coming years. HLIB also cut its target price by more than 74 per cent, from RM1.24 to 32 sen, significantly reducing expectations for future returns.
Prior to the downgrade, SMRT had benefited from one-off deployment revenue from Tenaga, which historically constituted a large share of its profits. In the first quarter of SMRT’s FY2026, about 38 per cent of group earnings came from one-off deployment projects, with the remaining 62 per cent coming from recurring managed services, underlining the company’s heavy reliance on Tenaga’s projects.
Revenue Risk as Tenaga Opens Vendor Base
Analysts point to a key structural shift: Tenaga’s decision to open its vendor base for SCADA systems. This change means SMRT is no longer the sole or dominant supplier for deployment contracts, reducing its future volume of high-margin one-off deployments. Historically, Tenaga’s smart grid rollouts and associated site deployments drove strong growth for SMRT, but with expected activity slowing from a historical rate of ~3,000 sites to fewer than 100, that core revenue stream is expected to significantly diminish.
HLIB’s revised forecasts reflect this shift, as earnings estimates for SMRT’s FY2026, FY2027 and FY2028 were cut by 18 per cent, 41 per cent and 44 per cent, respectively, and valuation multiples were reset lower.
Market Reaction and Trading Activity
Monday’s sell-off made SMRT one of the most actively traded stocks on Bursa Malaysia, with 186.2 million shares exchanged in the morning session alone. The sharp price drop triggered a temporary suspension of intraday short selling, a mechanism designed to curb excessive downward momentum, which will lift early on Tuesday.
Investors reacted to the new outlook with heightened caution, as concentrated customer revenue exposes SMRT to outsized earnings risk. Analysts noted that, while the company has other initiatives, including expansion into financial services and projects overseas such as in Indonesia, these are unlikely to offset the near-term earnings loss associated with slower deployments for Tenaga projects.
