MN Holdings' RM5bil pipeline could grow further on data centre expansion
KUALA LUMPUR: Malaysia’s power infrastructure cycle is building faster than expected, driven by rising investments in data centres (DCs), Tenaga Nasional Bhd’s (TNB) capital expenditure and solar projects, according to Hong Leong Investment Bank Bhd (HLIB).
Malaysia's power infrastructure cycle is accelerating due to increased investments in data centers, Tenaga Nasional Bhd's capital spending, and solar projects, according to Hong Leong Investment Bank Bhd (HLIB). The approval of an additional five gigawatts (GW) of data center capacity by the DC Task Force signals a significant rise in project awards in 2027 and 2028.
MN Holdings Bhd's tenderbook has reached a record RM5 billion, with TNB, DC, and solar projects all achieving new heights. Even before this expansion, MN Holdings' tenderbook has already hit a record RM5 billion, with Tenaga, DC, and solar projects all setting new records. HLIB reported that MN Holdings' orderbook stood at RM1.6 billion, offering visibility for its FY27 revenue forecast of RM1.2 billion, with around RM1 billion of DC and solar projects anticipated to be recognized within the year.
Within the DC segment, HLIB stated that MN Holdings had a RM1.6 billion tender pipeline, with approximately RM500 million tied to a major client, plus one UUE project and three new DC developments. The DC Task Force's approval of the extra 5GW could further hasten project awards in 2027 and 2028 if the projects advance to electricity supply agreement signings in 2027.
HLIB also noted that MN Holdings' solar tenderbook had attained a record RM400 million, with project sizes anticipated to rise, boosting demand for power infrastructure. The research firm highlighted that TNB had utilized RM5.6 billion of its RM13 billion FY26 regulated capital expenditure target, leaving a considerable sum to be spent in the later months of the year.
Within MN Holdings' TNB tenderbook, two 500-kilovolt (kV) projects, Pakas and Ujong Pasir, account for around RM1.5 billion, while another RM1 billion consists of 132kV and 275kV projects. HLIB projected that three additional 500kV projects in Elmina, Bahau, and Kampung Awal would enter the market, along with seven more 500kV projects potentially launching from 2027.
HLIB retained its Buy recommendation on MN Holdings and increased its target price to RM4.65 after extending its valuation base to 2027 and raising its target price-to-earnings multiple to 24 times from 22 times. The enhanced valuation was attributed to the swifter development of power infrastructure demand, including the additional 5GW DC pipeline approved by the DC Task Force.
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