MN Holdings hits record high riding on power infrastructure boom

KUALA LUMPUR (June 7): Shares in MN Holdings Bhd (KL:MNHLDG) surged to a record high on Friday, as Hong Leong Investment Bank (HLIB) bet on more power infrastructure projects for the company specialising in underground utilities and substation engineering services.

The counter climbed as much as 13 sen or 16.77% to 90.5 sen during the morning session. As of 11.42am, the stock was still 9.5 sen or 12.26% higher at 87 sen, giving it a market capitalisation of RM390.08 million. 

Some 23.32 million shares change hands, exceeding the 200-day average volume of 4.5 million shares. 

HLIB has initiated coverage of MN Holdings, with a ‘buy’ recommendation and a target price of RM1.12, based on an 18 times price-earnings ratio for earnings for the financial year ending June 30, 2025 (FY2025).

“The group’s strong track record in serving Tenaga Nasional Bhd (KL:TENAGA), data centre owners, and solar engineering, procurement, construction and commissioning (EPCC) contractors positions it as a strong contender for upcoming power infrastructure projects. 

“We view the stock as a good proxy to capitalise on Malaysia’s growing power infrastructure, which is poised for multi-year growth,” said HLIB, the only research house providing coverage of the stock. 

HLIB forecasts MN Holdings’ earnings to achieve a strong compound annual growth rate of 32.8% from FY2023 to FY2025, driven by expected robust order inflows from Tenaga, data centres, and solar projects. This projection is based on the research house’s assumption of RM245 million in secured orders from FY2023 to FY2026.

On the financial front, MN Holdings’ net profit for the third quarter ended March 31, 2024 (3QFY2024) grew 27.16% to RM4.7 million, compared with RM3.7 million a year earlier, on higher progress in construction activities of the substation engineering segment. 

This is the group’s highest quarterly net profit since its listing on the ACE Market of Bursa Malaysia in April 2022. 

Quarterly revenue rose 11.65% to RM51.11 million, from RM45.78 million for 3QFY2023. 

MN Holdings has gained over 57% year-to-date, and 314% against its initial public offering price of 21 sen.