KUALA LUMPUR (Sept 9): The pipeline across national electricity utility Tenaga Nasional Bhd (KL:TENAGA), data centres and solar projects is larger than expected, with record-high tenders worth RM5 billion submitted by MN Holdings Bhd (KL:MNHLDG), according to Hong Leong Investment Bank.
The pipeline across Tenaga Nasional, data centres and solar projects is larger than expected, with record-high tenders worth RM5 billion submitted by MN Holdings, according to the research house.
Project call-ups should accelerate in the second half of the year, “although the scale of the pipeline is now larger than we initially anticipated”, the research house said.
Hong Leong Investment lifted its target price for MN Holdings to RM4.65, the highest among four houses covering the stock, while maintaining its 'buy' call.
Shares of MN Holdings, which mainly provides underground utilities and substation engineering services, have been charting new highs this year amid major grid upgrades to cope with a wave of energy-hungry data centres mushrooming in Malaysia.
Malaysia is also accelerating the deployment of large-scale solar projects and increasing the size of each solar farm to drive the transition towards renewable energy.
The stock added another five sen, or 1% to RM3.77 in Wednesday trading. MN Holdings has more than doubled its market capitalisation so far this year to RM2.6 billion.
Tenaga Nasional, its biggest client, has deployed only RM5.6 billion of its RM13 billion regulated capital expenditure target for 2026 and remains committed to deploying the balance over the remaining months, Hong Leong Investment said.
“This implies a sizeable step-up in spending,” the house said, noting that MN Holdings has submitted bids for jobs worth around RM2.5 billion to Tenaga Nasional while another three major projects could be coming into the market this year.