MN Holdings On Safe Ground From AI Chip Ban
MN Holdings’ new EPCC contract valued at RM29.3 million from Tenaga Nasional for substation works in Johor, further strengthens the group’s position as a key player in Malaysia’s utility infrastructure upgrades and boosts its outstanding order book to a robust RM1.17 billion.
Maybank Investment Bank Research estimates the contract to yield an Earnings Before Interest and Tax (EBIT) margin of approximately 9%, translating to an estimated EBIT contribution of RM2.6 million over the contract period. This award represents about 6% of Maybank IB Research’s RM500 million order replenishment target for MNH in the financial year ending June 30, 2026. The group’s current outstanding order book of RM1.17 billion is equivalent to a significant 4.5 times its FY2024 revenue, providing strong earnings visibility.
The house highlighted that the risk to MNH from potential US AI-chip export bans on Malaysia is minimal. This is primarily because MNH’s existing data centre (DC) outstanding order book is largely supported by Chinese clients, who are not significantly impacted by such restrictions. Additionally, many of these clients operate CPU-based cloud workloads, which fall outside the scope of GPU-as-a-service model bans. The research firm also noted continued active expansion by these clients in Sedenak and the Klang Valley.
MNH’s long-term growth trajectory remains well-supported by structural drivers within the energy sector. These include TNB’s ongoing grid and substation upgrades, with multiple upcoming 500kV projects. The group is also actively exploring new opportunities in various high-growth segments, including Large Scale Solar (LSS) projects (LSS5, LSS5+, and LSS6, targeted for commercial operation between 2026 and 2027), Battery Energy Storage Systems (BESS), and water and waste-water projects. MNH’s tender book currently stands at an impressive RM1.8 billion, reflecting a healthy pipeline of potential projects.
Maybank IB Research has maintained its “BUY” call on MNH with a target price of RM1.69, pegged to 17 times price-to-earnings ratio (PER), accounting for market volatility.
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