KUALA LUMPUR: MN Holdings Bhd
advanced in early trade on Tuesday after its consortium secured a submarine power cable upgrade contract from Tenaga Nasional Bhd (TNB).
The underground utilities engineering services solutions provider rose 0.62%, or one sen, to RM1.61 at 9.31 am. Year-to-date, the counter has risen about 28%.
MN Holdings’ wholly-owned subsidiary, MN Utilities Engineering Sdn Bhd (MNUE), as part of a consortium together with South Korea's LS Cable & System Ltd (LSC) and Pembinaan Tajri Sdn Bhd (PTSB), was awarded a RM177.36mil submarine power cable system contract from TNB.
MNUE will hold a 10% stake in the consortium, while LSC will hold 89%, with the remaining 1% held by PTSB.
Phillip Capital said the contract marks MN Holdings’ second TNB contract win in FY26E, lifting year-to-date new wins to 7.7% of its RM600 mil FY26 order replenishment assumption.
It said the outstanding order book has risen to RM881mil, translating into a 3.4 times historical FY24 revenue cover and providing strong earnings visibility through FY27E.
“Assuming a 7% PAT margin for TNB-related projects, we estimate this contract to contribute c.RM1.2m PAT over FY26–27E.
Phillip Capital said that, assuming a 7% profit after tax (PAT) margin for TNB-related projects, the contract is estimated to contribute about RM1.2mil in profit after tax over FY26–27E.
“The latest win reinforces our view that MN is well positioned as a key beneficiary of TNB’s higher allowable capex of RM42.8bil under RP4 (2025–27E), with TNB projects currently accounting for 44% of MN’s total order book,” it said.
“Looking ahead, we expect order replenishment momentum to remain robust, supported by an RM1bn tender pipeline spanning TNB (34%), data centres (15%), water & sewerage (12%), solar (11%), and others (28%). Management is targeting to expand its tender book to RM2bil by 1HFY26,” it added.
Phillip Capital has maintained its “buy” rating and 12-month target price of RM2.20, as the contract win aligns with its existing assumptions and no changes were made to its earnings forecasts, based on an unchanged 20 times price-earnings multiple on fully diluted CY26 earnings per share.
“We continue to like MN as a proxy for Malaysia’s expanding power infrastructure and strategic exposure in the rapidly growing DC and solar sectors.
“Key risks to our buy call include slower-than-expected project rollouts, which could affect order book replenishment and unforeseen delays,” it added.
Maybank Investment Bank Research said that, based on its 10% effective stake, the project adds RM17.7mil to MN Holdings’ order book, lifting total outstanding orders to RM882mil.
It said year-to-date new wins now stand at about RM72mil, representing 14% of its FY26E replenishment target of RM500mil.
“We maintain our earnings forecast, as this contract win aligns with our RM500mil replenishment assumptions for FY26E. We maintain our ‘buy’ call and target price of RM2.27, based on a 23 times multiple on FY26E earnings per share (+1 standard deviation of the three-year mean).
“We continue to favour MN Holdings for its strategic exposure across the data centre, TNB and solar segments.”
