KUALA LUMPUR: Hong Leong Investment Bank Bhd (HLIB) is positive on the outlook for MN Holdings Bhd
(MNH), citing its strong exposure to high-growth sectors such as solar and data centres (DC).
The investment bank has maintained its 'buy' call on MNH, raising its target price to RM1.74.
MNH is well-positioned as a proxy for Malaysia’s rising power demand and stands to benefit from Tenaga Nasional Bhd’s capital expenditure upcycle, HLIB said in a note today.
As at 10.45 am, MNH shares rose one sen to RM1.10 on Bursa Malaysia, with 2.91 million shares traded.
In a filing with the exchange yesterday, MNH said its wholly owned subsidiary, MN Holdings Project Manager Mutu Nusantara Sdn Bhd, had secured a RM180 million contract for the engineering, procurement and construction of a substation for a DC in the southern region of Peninsular Malaysia.
The contract was awarded by a client involved in infrastructure services for hosting, data processing and related activities, it said.
HLIB said the latest win lifted MNH’s order book to a record RM1.1 billion, with total wins in financial year 2025 (FY2025) amounting to RM1.0 billion.
This represents 4.5 times MNH’s FY2024 revenue and is expected to keep the group busy over the next two years.
"Encouragingly, this marks MNH’s largest single contract to date. We understand the consumer landing stations job is part of a DC project by an Asia-based operator establishing its first facility in Malaysia.
"Successful execution will strengthen MNH’s track record and enhance its prospects of securing further contracts from other DC operators,” the note said.
HLIB raised its earnings forecasts for MNH by 0.9 per cent, 16.0 per cent and 0.7 per cent for FY2025F, FY2026F and FY2027F respectively, based on a higher order win assumption of RM1.07 billion for FY25F, up from RM850 million previously.
It also expects more DC contracts to materialise, driven by the expansion of existing clients and the entry of new players into Malaysia.
"Management noted that upcoming projects will be concentrated in the central region, primarily from Western-based DC operators.
"This shift from Johor will benefit MNH’s underground utilities engineering segment, as project management units in the central region are typically less strategically located, resulting in longer cable routes and higher contract values,” it added. - Bernama
