KUALA LUMPUR (Dec 5): MN Holdings Bhd's (KL:MNHLDG) contract wins and financial performance in its current financial year are expected to hit a new record, supported by strong order book and record-breaking tender prospects, said Phillip Capital.

“We believe MN is on track for FY2025 (financial year ending June 30, 2025) surpassing FY2024 new contract wins of RM349 million,” said Phillip Capital in its latest company note.

The group’s tender book reached an unprecedented RM1.2 billion as of November 2024, a 20% increase quarter-on-quarter.

Notably, this figure excludes priority data centre (DC) work packages worth approximately RM300 million, which are anticipated to be rolled out in January-June 2025, said Phillip Capital, which maintained its target price (TP) of RM1.20 on the stock.

The group, whose better-than-expected first quarter core earnings constituted 28% of consensus forecasts, had RM601 million outstanding in its order book — which Phillip Capital said provides 2.4 times coverage on its FY2024 revenue.

MN Holdings continues to benefit from Malaysia’s expanding power infrastructure needs, including TNB-related initiatives and Sarawak Energy projects, which form 43% and 31% of its tender book, respectively. The company is also diversifying its portfolio, with tenders in solar (9%) and water sewerage (3%) sectors.

Phillip Capital and Hong Leong Investment Bank, the only research houses covering MN Holdings, have maintained a 'buy' call on the stock, with an average 12 month target price of RM 1.51, implying a potential upside of 41.12% from the share price of RM1.07 at the time of writing, according to Bloomberg.

HLIB, in its Nov 26 note, has raised its target price to RM1.82 on upward revision to FY2026 forecasts to 7.6 sen per share. It also raised FY2025 core earnings by 8% to seven sen per share.

“We expect stronger billings from the substation engineering segment in the coming quarter as major projects transition from their initial stages into accelerated progression,” the research house said.

For 1QFY2025, MN Holdings reported net profit rising 70.6% on-year and 42.9% on-quarter to RM7.1 million or 1.49 sen per share, as revenue surged 87% year-on-year to RM103.1 million.

The group, whose core markets are the power, gas and sewerage industries, operates an underground utilities engineering segment which contributed 52.4% of its revenue in the quarter, and substation engineering segment (47.6%).