Hong Leong Investment Bank Bhd (HLIB) maintained its BUY call on MN Holdings Bhd with an unchanged target price of RM3.95, seeing stronger earnings ahead as about RM1 billion in data centre projects secured in the first half of 2026 enter a stronger revenue recognition cycle.
The research house said MN Holdings concluded FY26 with a record core profit after tax and minority interest (PATAMI) of RM100.8 million, up 65.5% year-on-year and broadly in line with its and consensus forecasts.
For the fourth quarter, core PATAMI stood at RM22.8 million, down 8.9% quarter-on-quarter but up 2.1% year-on-year. HLIB said the softer sequential performance was mainly due to newly secured data centre projects being at their initial stages, where margins are typically lower.
Still, revenue for the quarter rose 5.7% quarter-on-quarter, supported by stronger contributions from its Underground Utilities Engineering and Substation Engineering segments. For the full year, revenue jumped 62.3%, driven largely by a 115% increase in Substation Engineering sales as progress accelerated across several key data centre projects.
Looking ahead, HLIB expects the bulk of the RM1 billion data centre jobs secured in the first half of 2026 to generate stronger earnings from the upcoming quarter. The research house also sees a healthy pipeline across data centres, Tenaga Nasional Bhd and solar projects.
It expects more tender awards from Tenaga in the second half of 2026, while continued data centre expansion and solar demand should provide further order opportunities.
As of 11.50 am, the stock price dropped 1.69% to RM3.50
