KUALA LUMPUR (May 14): MN Holdings Bhd (KL:MNHLDG) has been awarded a RM37.91 million contract to build a waste-to-energy interconnection facility.

The contract, secured by MN Holdings’ wholly owned Mutu Nusantara Sdn Bhd, involves the design, procurement, supply, factory acceptance tests, installation, construction, testing and commissioning for the waste-to-energy interconnection facility, the group's bourse filing showed on Wednesday.

The identity of the customer, referred to as Company A — principally involved in investment holding and the provision of civil engineering and electrical works — was undisclosed due to a non-disclosure agreement.

Company A will be in charge of the project's civil engineering and electrical works, which encompass the design, engineering, procurement, construction, installation, testing and commissioning of the facility’s transmission lines, located at the Central Region of Peninsular Malaysia.

The contract, which starts on Wednesday, is scheduled to be completed on March 31, 2027.

Maybank Investment Bank has initiated coverage on MN Holdings, with a ‘buy’ call on the stock and a target price of RM1.69. It noted that MN Holdings could potentially expand at an average annual rate of nearly 50% over the next three financial years, driven by energy transition and industrial growth.

As a firm that provides engineering services to utilities, MN Holdings benefits from power grid upgrades, rising demand from data centres and semiconductors as well as a shift to renewable energy, Maybank said in a note.

MN Holdings’ RM1.16 billion order book is anchored by data centres and jobs related to national electric utility Tenaga Nasional Bhd (KL:TENAGA), Maybank said, adding that its tender pipeline of RM1.77 billion adds further visibility.

Maybank joins Hong Leong Investment Bank and Phillip Capital in placing MN Holdings on ‘buy’. The average target price is now RM1.70, according to the three houses tracked by Bloomberg, suggesting a potential return of up to 30% in the next 12 months from the current price.

On Wednesday, MN Holdings’ share price closed eight sen or 6.5% higher at RM1.31, bringing the group a market capitalisation of RM736 million. Over the past one year, the stock has risen 81%.