HLIB keeps 'Buy' call on MN Holdings, RM4.65 target

KUALA LUMPUR: Hong Leong Investment Bank Bhd (HLIB) has maintained its "Buy" call on MN Holdings Bhd with an unchanged target price of RM4.65, citing the company's strong positioning to benefit from Malaysia's accelerating power infrastructure investment cycle.

The investment bank said MN Holdings' latest contract win to build power facilities for a data centre brought its year-to-date contract win for 2027 to RM643 million, representing 64 per cent of HLIB's RM1 billion full-year target for the company.

Including the latest award, HLIB estimated MN Holdings' outstanding order book at a record RM1.89 billion, with data centre-related jobs accounting for the majority at 68 per cent.

"We remain positive on Malaysia's power infrastructure upcycle, with strong data centre and solar project pipelines driving demand for power infrastructure works from both private players and Tenaga.

"We continue to see MN Holdings as a key beneficiary of this upcycle, backed by its strong balance sheet and proven execution track record," it said in a note.

The firm said there is a potential for MN Holdings contract wins for financial year 2027 (FY27) to surpass RM1 billion.

HLIB added that Malaysia's power infrastructure cycle is set to accelerate in FY27; in particular, the additional five gigawatts of capacity approved by the Data Centre Task Force points to a significant pickup in project call-ups over 2027 through 2028.

"To meet the growing demand, Tenaga Nasional Bhd (TNB) remains committed to its regulated capex plan, with spending expected to pick up further in FY27.

"Even before the anticipated acceleration, MN Holdings tenderbook has already reached RM4.7 billion, with TNB, data centre and solar tenders all at record highs.

"Within the data centre segment, we understand that several of MN Holdings' existing customers are expanding across multiple sites, which should translate into more project opportunities as each campus enters subsequent development phases," added HLIB.