PETALING JAYA: MN Holdings Bhd
is positioning itself for an accelerated growth trajectory as rising electricity demand and surging investments in data centres (DCs) provide infrastructure opportunities.
The company’s planned private placement, aimed at strengthening liquidity, comes at a time when large-scale contracts from Tenaga Nasional Bhd (TNB) and DC operators are expected to intensify.
Hong Leong Investment Bank (HLIB) Research said MN Holdings is well-positioned to benefit as more TNB and DC-related contracts come on stream moving forward.
“For TNB, we estimate annual investments of RM3bil to RM3.5bil from its base capital expenditure (capex) into grid infrastructure, translating into a RM6.7bil to RM7.8bil opportunity within the transmission substation segment for mechanical and engineering players,” it said.
The research house added that the DC segment remained promising, driven by expansion plans of existing clients and the anticipated entry of new global players into Malaysia.
“In particular, we are encouraged by customer A’s sizeable investment pipeline, which could offer MN Holdings multi-year growth opportunities,” it said, noting that the upcoming large-scale solar 5 (LSS5) and LSS5+programmes would further fuel demand for power infrastructure.
HLIB Research is maintaining a “buy” call on MN Holdings with an unchanged target price of RM1.88 a share , premised on 20 times estimated fully diluted earnings per share (EPS) of 9.4 sen for the financial year ending June 30, 2026 (FY26).
“We favour the group for its strong exposure to high growth sectors such as solar and DC.
“Additionally, MN Holdings is well-positioned as a proxy for Malaysia’s rising power demand and stands to benefit from TNB’s capex upcycle,” the research house said.
MN Holdings has proposed a private placement of up to 10% of its issued shares, with pricing to be determined later.
Bursa Malaysia’s approval will allow the exercise to be executed in one or multiple tranches within six months, or longer if extended. Placement shares will be issued at no more than a 10% discount to the five-day volume weighted average market price before fixing.
Explaining the rationale, HLIB Research noted MN Holdings holds a net cash position of RM64.7mil as at the third quarter of FY25.
“However, much of this cash is already committed – about 40% has been pledged for bank facilities to finance projects, while the remaining are allocated for the working capital for its existing RM1.13bil order book,” it observed.
With TNB contracts typically requiring a 5% performance bond and DC jobs demanding significant upfront working capital, the research house said the RM84.3mil to RM95.88mil placement proceeds would mainly support working capital, with part earmarked for fixed deposits to secure additional bank facilities.
Phillip Capital Research shared a similar view, stressing that the move was widely anticipated.
“This exercise comes as little surprise, given MN Holdings’ expanding order book and the need for additional funding to ensure smooth execution of upcoming projects,” it said.
The brokerage highlighted that proceeds have been allocated to equipment (RM75mil), marginal deposits (RM17mil) and preliminary expenses for ongoing projects (RM3mil). Upon completion, MN Holdings’ net cash position is expected to rise to RM161mil, providing ample financial headroom to pursue new projects in the DC, TNB, and solar sectors.
However, Phillip Capital also flagged some dilution.
“The exercise is expected to dilute our FY26–27E EPS by around 8–9% after factoring higher interest income,” it said, while reiterating a “buy” call with a 12-month target price of RM1.72 a share , based on 18 times forward fully diluted EPS.
“We continue to like MN Holdings as a proxy for Malaysia’s expanding power infrastructure and strategic exposure in the rapidly growing DC and solar sectors,” Phillip Capital said.
