MNHLDG (0245): Riding the Wave of Utility Upgrades and Digital Infrastructure
Summary (TL;DR):
- Research Firm: MAYBANK Investment Bank
- Subject: MNHLDG / MNHLDG (0245)
- Core Rating: BUY
- Target Price / Top Picks: MYR 1.69
- One-Liner: MN Holdings continues to strengthen its position in Malaysia’s utility upgrades and digital infrastructure, securing new contracts and diversifying into key growth areas, with minimal impact from potential AI chip export bans.
Report at a Glance
MAYBANK Investment Bank released its latest research report on MNHLDG on 2025-07-07, maintaining a “BUY“ rating with a target price of MYR 1.69. The core thesis of the report is that MN Holdings is well-positioned to capitalize on Malaysia’s ongoing utility upgrades and the expansion of digital infrastructure, supported by a robust order book and strategic diversification into new growth segments.
Investment Thesis (The Bull Case)
- Point 1: Recently secured a MYR29.3 million EPCC contract from TNB for substation works in Johor, boosting its order book to MYR1.17 billion and reaffirming its role in national utility upgrades.
- Point 2: The company’s exposure to potential US AI-chip export bans is deemed minimal, as its data centre (DC) order book is largely supported by Chinese clients whose cloud workloads are primarily CPU-based, not GPU-dependent.
- Point 3 / Key Beneficiaries: MN Holdings is actively exploring opportunities in large-scale solar (LSS5, LSS5+, LSS6), Battery Energy Storage System (BESS), water, and waste-water projects, alongside benefiting from TNB’s ongoing grid and substation upgrades, including upcoming 500kV projects.
Potential Risks (The Bear Case)
- Risk 1: Project delays, particularly from slower rollout of TNB jobs or delays in data centre construction, could impact billing and cash flow.
- Risk 2: Potential cost inflation or supply chain disruptions, leading to rising input costs for materials or subcontractor rates, which could compress profit margins.
- Risk 3: Intensifying competition, especially within the underground utilities space, could result in margin pressure or loss of tenders.
Financial Forecast Summary
The analyst’s financial projections for the coming years are as follows:
| Fiscal Year (YE to June) | FY25F | FY26F | FY27F |
|---|---|---|---|
| Revenue (RM mil) | 589 | 780 | 819 |
| Net Profit (RM mil) | 45 | 60 | 64 |
| EPS (sen) | 7.8 | 9.9 | 10.4 |
| DPS (sen) | 0.0 | 0.0 | 0.0 |
| Dividend Yield (%) | 0.0 | 0.0 | 0.0 |
| P/E Ratio (x) | 19.3 | 15.1 | 14.5 |
(Source: MAYBANK Investment Bank research report)
Valuation & Target Price
| Rating | BUY |
| Last Close Price | MYR 1.50 |
| Target Price (TP) | MYR 1.69 |
| Valuation Methodology | The target price is pegged to 17x PER, which is equivalent to -0.5 standard deviation of its 3-year mean P/E of 19.1x, adjusted to account for current market volatility. |
Analyst’s Conclusion
- Overall Stance: MAYBANK Investment Bank maintains a “BUY” rating on MNHLDG, highlighting strong earnings visibility underpinned by its MYR1.17 billion order book and MYR1.8 billion active tender book, positioning the company for continued growth.
- Key Catalyst/Strength: The company’s strategic focus on power infrastructure works, including high-voltage substations and underground cabling, makes it a critical enabler of Malaysia’s energy transition and digital economy, benefiting from ongoing grid upgrades and data centre expansions.
- Major Headwind/Risk: The primary concerns remain potential project delays and the risk of cost inflation, which could impact the execution timeline and profit margins of its projects.
- What to Watch: Investors should monitor stronger-than-expected contract wins, particularly in the substation and data centre segments, and the pace of TNB and government capital expenditure rollout, as these could significantly boost MNHLDG’s addressable market and order book.
Disclaimer: This article is a summary and interpretation of a research report published by MAYBANK Investment Bank on 2025-07-07. All information is for reference purposes only and does not constitute investment advice. Investors should conduct their own independent research and due diligence and assume all associated risks.
