PETALING JAYA: The substation engineering contract worth RM138mil bagged by MN Holdings Bhd
(MNH) brings its latest order book to a new record-high of RM978mil.
The contract is from Tenaga Nasional Bhd (Tenaga) to establish a new 275 kilovolt (kV) transmission main intake at the Kenyir Switching Station located at the Kenyir Hydro Power Station in Terengganu.
The contract is for 24 months, with work expected to begin soon and completion by March 2027.
MNH is engaged in the provision of underground utilities and substation engineering services and solutions.
Notably, this is MNH’s largest contract from Tenaga and is testament to its expertise in high-voltage power infrastructure projects, said Phillip Capital Research.
“Year-to-date job wins of RM884mil have exceeded our previous full-year replenishment target of RM700mil. MNH’s order book stands at RM978mil, which implies a strong cover of 3.8 times on financial year 2024 (FY24) revenue, providing strong earnings visibility over the next two years,” the research house said in a report yesterday.
“Assuming a 7% profit after tax margin, we project that the contract will contribute approximately RM10mil in profit after tax and minority interests, over FY26 to FY27,” the research house said, adding the group’s tender pipeline remains strong at RM1.4bil across various sectors.
Imputing higher order book replenishment, the research firm raised its FY26 to FY27 earnings forecast to between 1% and 6% and kept its “buy” call on the stock with a RM1.60 target price.
Hong Leong Investment Bank Research (HLIB Research), which also has a “buy” on the stock, said it also anticipates more job wins for MNH, driven by increased capital expenditure by Tenaga from 2025 to 2027.
“We favour the group for its strong exposure to high-growth sectors such as solar and data centres. Additionally, MNH is well-positioned as a proxy for Malaysia’s rising power demand and stands to benefit from Tenaga’s capital-expenditure upcycle.
HLIB Research has a RM1.54 target price on MNH. At the time of writing, its shares were trading at RM1.08, translating to a market cap of RM604.93mil.
For its second quarter ended Dec 31, 2024, MNH’ net profit rose to RM12.58mil from RM3.92mil in the previous corresponding period, while revenue grew to RM125.48mil from RM74.92mil a year earlier.
In a filing on its second quarter financial performance, MNH said it remains well-positioned to capitalise on Malaysia’s ongoing energy transition and infrastructure development, supported by key government initiatives.
“With ongoing tenders, strategic partnerships and government-backed infrastructure investments, the group remains confident in sustaining organic growth, enhancing its presence in key infrastructure sectors and driving long-term profitability,” it said.
