MNHLDG: Earnings Momentum Strengthens on Robust Order Book, Future Pipeline Bolsters Outlook

A leading infrastructure player is poised for continued earnings growth, driven by a healthy order book and significant future tender pipeline. The investment bank noted robust performance with earnings momentum expected to strengthen in the near term, although a slight moderation is anticipated in the second half of the fiscal year as current projects conclude and new ones enter their early ramp-up phases.

Performance Review and Order Book Strength

The company’s outstanding order book remains robust at RM864 million as of November 2025. This strong foundation is primarily anchored by significant contributions from TNB projects (43%) and data centre (DC) infrastructure (36%), with solar projects accounting for 4% and other segments making up the remaining 17%. The report highlighted that key customers are accelerating project execution, which is expected to translate into stronger revenue contribution in the coming quarters. Specifically, the delivery of four TNB substation projects worth RM94 million and steady progress on substation EPCC works for Customer C (RM170 million) and Customer E (RM180 million) are crucial drivers for the anticipated earnings acceleration in 2QFY26.

Future Opportunities and Strategic Outlook

Looking ahead, the group’s tender book rebounded significantly to RM1 billion, marking a 31% quarter-on-quarter increase. This growth is fueled by sustained TNB tender cycles and an additional RM285 million from other development substations projects. The company is strategically prioritizing its DC tenders, preparing for the next expansion phase of Customer A, which is estimated to be worth RM700 million. Furthermore, the group is actively preparing for LSS5 interconnection facility tenders valued at RM150 million and targeting an additional RM200 million in TNB-related opportunities. These initiatives are expected to expand the current tender book to RM2 billion by 1HFY26, reinforcing long-term prospects, particularly with emerging opportunities under the ASEAN Power Grid initiative and developments in high-voltage substation and transmission infrastructure.

Challenges and Recommendation

While the outlook remains positive, the report acknowledges that earnings may taper slightly in 2HFY26 as several 1HFY26 projects reach completion and newer projects are still in the early stages of ramping up. Key risks to the positive recommendation include slower-than-expected project rollouts, which could impact order book replenishment, and unforeseen delays in project execution. Despite these potential headwinds, the investment bank has maintained its BUY recommendation with a 12-month target price of RM0.25, reflecting confidence in the company’s strong positioning to capture structural growth opportunities in the power infrastructure segment, as well as its strategic exposure to the rapidly expanding DC and solar sectors.