SMRT Holdings Bhd has done amazingly well in the past year, surging 452.8% to close at RM1 on Jan 22. The counter even raced to a year high of RM1.14 from a low of 16 sen. After losing some steam from its year high, the counter is likely to trade near higher to sprint towards RM1.20.

The escalation of the share price may seem excessive but there are a couple of reasons for investors to be excited about SMRT.

Firstly, results speak for itself. The company had already posted commendable financial performance in 1QFY24 and to extend into 2QFY24, driven by strong site deployments. The deployments will come from utility companies, which normally use their capex towards the second half of the year. It is likely that the increased site deployment will come from utility companies in Malaysia and Indonesia.

Malaysia is actively pursuing smart grid initiatives, while Indonesia is transitioning its ATM from satellite to wireless connections. These are definitely a boon for SMRT as these initiatives provide a consistent pipeline for site deployments and contributing to the proliferation of recurring income base for the company via iits managed services.

SMRT has ventured into four regions (Lampung, Nusa Tenggara Timur, Jawat Barat, and Kalimantan Timur dan Utara) after securing PLN as a customer in 4QCY22.

In 1QFY24, the group achieved a notable milestone by expanding its presence into the Jakarta district, marking its fifth regional win. SMRT is responsible for establishing wireless infrastructure for the region's distribution substations and may conduct protocol conversion if necessary. The company is not stopping at being in 4 regions in Indonesia, having penetrated only 5 out of 22 of Indonesia districts.

Surely, there should be more districts to come on board over time given SMRT’s track record. Making further inroad into oversea market. SMRT has secured its maiden contract from Air Selangor, marking its foray into the water segment.

SMRT's scope of work involves establishing wireless infrastructure and installing sensors for critical operationsites such as treatment plants, pump houses, reservoirs, and DMZs for Air Selangor.

It is worth noting that the water segment is likely to generate a higher revenue per sites compared to the power and financial services sectors over the same contract period due to the larger scope of work.