Shares of WCT Berhad were down as much as three percent in early trading on Tuesday after the construction company said it lost a 1 billion ringgit ($327.06 million) contract to build a highway in Oman.
WCT said in a stock exchange filing late on Monday that it was informed on April 6 that the project, the Batinah Expressway - Package 2, had been cancelled.
"This cancellation will impact WCT negatively in the long-term. The project cancellation will reduce its outstanding external order book significantly by 23 percent to 2.6 billion ringgit," Kenanga Research said on a note on Tuesday.
The loss of the contract will dampen WCT's earnings prospects for the next three years, it said.
Kenanga downgraded WCT to "market perform" from outperform" and cut its target price on the WCT shares to 2.30 ringgit from 2.52 ringgit per share.
Affin Investment Bank also cut its target price on WCT to 2.90 ringgit from 3.13 ringgit per share .
The cancellation of the project is a negative development unless a re-tender is held and WCT wins it, Affin said.
At 0936 (0136 GMT), WCT was trading down 2.45 percent at 2.39 ringgit per share while the benchmark composite index was down 0.03 percent at 1687.62.
0942 (0142 GMT) (Reporting by Siva Sithraputhran in Kuala Lumpur; Editing by Bijoy Koyitty)