MNHLDG: New DC Project Bolsters Future Outlook, Firm Reiterates Buy Rating
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A recent development in the industrial sector has seen a firm secure a significant direct current (DC) project, substantially bolstering its earnings visibility for the financial year 2026 (FY26E) and beyond. This strategic win further strengthens its robust order book and reinforces its position as a key player in critical power infrastructure.
Project Details and Impact
The company’s wholly-owned subsidiary recently accepted a Letter of Appointment for a DC project valued at RM216 million. This comprehensive project encompasses the design, construction, installation, testing, and commissioning of a substation, including high-voltage cable connections for data centers in Southern Peninsular Malaysia. Commencing in February 2026, the project is slated for completion by September 2026. This contract is estimated to contribute RM22 million to profit after tax (PAT) over FY26-27E. The new win elevates year-to-date contract acquisitions to approximately 71% of the estimated RM700 million FY26E order replenishment target.
Strengthening Order Book and Future Outlook
With this latest addition, the outstanding unbilled order book has swelled to RM1.1 billion, providing strong earnings visibility through FY27E. DC projects now constitute 52% of the total order book, underscoring the company’s growing exposure to this critical segment. The company anticipates continued robust order replenishment momentum, supported by a substantial RM2.9 billion tender pipeline. This pipeline is diversified across various sectors, with significant portions from Tenaga Nasional Berhad (TNB) at 49%, DC projects at 25%, and contributions from water & sewerage (2%), solar (12%), gas pipeline (1%), and other segments (11%).
Investment Recommendation
Despite the substantial contract win falling within current replenishment targets, analysts are maintaining their earnings forecasts. The investment bank reiterates a BUY rating, supported by an unchanged 12-month target price. This recommendation reflects confidence in the company’s role as a proxy for Malaysia’s expanding power infrastructure and its strategic foothold in the rapidly growing DC and solar sectors. Key risks highlighted for the investment call include potential slower-than-expected project rollouts and unforeseen delays affecting order book replenishment.
