MBSB Research has placed its recommendation and target price for Zetrix AI Bhd under review, warning that the suspension of the group’s Road Transport Department (JPJ) services has created significant uncertainty over its earnings, operating continuity and financial position.
The move follows the Transport Ministry’s suspension of JPJ services through My E.G. Sdn Bhd and Zetrix AI channels from Oct 5 after the group failed to transfer RM314 million in government revenue collections within the stipulated period.
MBSB said the arrears accumulated between May 19 and Sept 30, 2026, and cautioned that even if Zetrix settles the amount in full, resumption of its role as a JPJ collection agent is not guaranteed.
“At this juncture, it would be difficult to assess the potential impact to FY26 earnings and beyond,” the research house said.
The Transport Ministry and JPJ had conducted four engagement sessions with stakeholders since May and issued 35 reminder notices, in addition to setting deadlines for settlement. MBSB noted that the authorities have also indicated that appropriate legal action could be taken to recover the outstanding government revenue.
Beyond the immediate suspension, MBSB highlighted a structural risk from the government’s continued promotion of its MyJPJ application, alongside the JPJ Public Portal, counters and kiosks.
The availability of these alternative channels means the need for third-party collection agents could diminish over time, potentially affecting the long-term relevance of Zetrix AI’s JPJ-related business.
MBSB said Zetrix would first have to clear the entire arrears before discussions over reinstatement could begin.
Even if services are restored, the research house sees the possibility of tighter operating procedures, including requirements for government collections to be transferred immediately to prevent a recurrence of the current situation.
Zetrix AI has since said it submitted a proposal to the government to resolve the outstanding remittances and is working towards restoring the affected services, subject to approvals.
MBSB also raised concerns about Zetrix AI’s financial position.
Based on its second-quarter FY2026 results, the group had RM541.6 million in cash and cash equivalents, compared with RM853.1 million in short-term loans and borrowings.
The research house therefore did not rule out the possibility that the group could face difficulty settling the RM314 million obligation in the near term.
Zetrix AI’s shares were priced at 6.5 sen as at Oct 5, giving the company a market capitalisation of about RM507.1 million. The stock has fallen 68.6% over the past month and 90.6% over 12 months, with its 52-week trading range at six sen to 91 sen.
MBSB also highlighted MARC Ratings’ recent decision to revise Zetrix AI’s MARCWatch status to Negative from Developing.
According to the report, MARC cited heightened concerns over transparency and governance, as well as the continued lack of material information required to assess the company’s credit profile.
Outstanding information reportedly includes details surrounding the sharp increase in borrowings and the allocation and utilisation of significant development expenditure.
MARC’s concerns were further heightened by the resignation of Zetrix AI’s external auditor, reported payment arrears and the suspension of certain operating activities.
MBSB said the Negative watch increases the likelihood of a ratings downgrade should the issues remain unresolved.
Despite the uncertainty, MBSB has not yet revised its earnings forecasts, preferring to await further developments.
Its current forecasts assume FY2026 core net profit of RM1.10 billion, rising to RM1.26 billion in FY2027 and RM1.47 billion in FY2028.
The research house noted that businesses outside Zetrix AI’s AI and blockchain segment currently contribute about 40% of group revenue, making the eventual impact of the JPJ suspension an important factor in reassessing its forecasts.
For now, MBSB said uncertainty surrounding the RM314 million arrears, potential legal action, the prospect of service reinstatement and the group’s financial position prevents it from assigning a fresh recommendation or target price.
