PETALING JAYA: MN Holdings Bhd
’s latest contract win from a US-based data centre client to undertake engineering, procurement and construction of a electrical substation in Johor could be the first of more contracts to come from other data centre operators, analysts say.
Hong Leong Investment Bank Research (HLIB Research) stated the RM168.8mil contract from the undisclosed client takes MN Holdings’ order book value to an all time high of RM892mil, leading to a revision in its forecast on the company.
“We expect more data centre-related contracts to materialise, driven by the expansion plans of existing clients and the anticipated influx of new data centre players into Malaysia.
“Successfully completing this project will enhance MN Holdings’ track record, positioning the group to secure additional data centre jobs by leveraging its experience with both China and US-based data centre operators,” the research house said in a report.
HLIB Research has upped its forecast of MN Holdings’ contract wins for this year, 2026 and 2027 to RM700mil, RM450mil and RM400m, respectively, up from RM600mil, RM400mil and RM300mil, respectively, earlier.
It however incorporated a lower margin assumption as a conservative measure to account for increasing competition in the substation business.
As a result, earnings for this year, 2026, and 2027 were revised upward by 8.7%, 17.2% and 23.2% respectively.
Phillip Capital Research expects the latest project to contribute RM14mil to earnings of MN Holdings this year and into next year, assuming a 8% net profit margin for data centre-related wins.
The research house noted the contract also took MN Holdings’ total awards for this year to RM705mil, while its tender pipeline stands at RM1.5bil.
The research house added exclusive bids with key clients could contribute an additional RM200mil worth of jobs to MN Holdings next year.
Phillip Capital Research made no changes to its earnings forecast for MN Holdings and kept its “buy” call on the stock with a target price of RM1.60 a share, pegged to and unchanged 20-times price-earnings multiple on fully diluted earnings per share (EPS) for this year.
“We continue to like MN Holdings as a proxy for Malaysia’s expanding power infrastructure and strategic exposure in the rapidly growing data centre and solar sectors,” it added.
HLIB Research also maintained its “buy” call on the company with a lower target price of RM1.54 a share from RM1.60 based on 22-times adjusted EPS of seven sen for next year and fully imputing the dilution impact from its warrants.
