Data center benefits spread downward, and MN Holdings and KJTS are sought after

Data center concept stocks are in full swing. This positive trend is already spreading to the lower tier sector. Yesterday, it received a RM0.136 billion data center contract $MNHLDG(0245.MY)$, and those that are expected to get related contracts $KJTS(0293.MY)$It was favored by brokerage firms today.

$MNHLDG(0245.MY)$Yesterday (Wednesday), it was announced that it has received a RM0.1 billion36.24 million contract to provide construction projects such as user landing station (CLS) services for the data center, boosting morale in related contracting fields.

MN Holdings orders hit a new high

Hong Leong Investment Bank analysts believe that this contract will $MNHLDG(0245.MY)$The order volume for FY2025 reached a record high of RM0.5 billion6,800.

The report further said that according to some sources, the data center operator plans to build a new facility in Johor.

“ $MNHLDG(0245.MY)$We have always built CLS and underground pipelines for this customer, so we think the company will be a pioneer in new projects in the future.”

Another company that has received potential contracts for data centers $KJTS(0293.MY)$The company focuses on refrigeration energy technology. After meeting with management, CIMC analysts learned that the company is confident of winning a data center contract.

Pledge the refrigeration contract

“ $KJTS(0293.MY)$ We are confident that we will be able to secure large-scale cooling energy system contracts for 1-2 data center buildings. Obtaining any relevant contract is a stepping stone for data center-related projects.”

Analysts believe that as Malaysia gradually becomes the third-largest data center market in Asia, industrial-related companies will also benefit.

$KJTS(0293.MY)$In January of this year, it was first listed at 27 cents, and the stock price has risen 194% so far; $MNHLDG(0245.MY)$Shares have also risen 78% this year.

The two investment banks are respectively optimistic about related companies, and both have given a “buy” rating. Hong Leong Investment Bank will $MNHLDG(0245.MY)$The target price was raised from RM1.15 to RM1.55.

CIMC analysts will also $KJTS(0293.MY)$The target price was raised from 82 cents to 92 cents.

A data center treasure

An analyst at Hong Leong Investment Bank further pointed out that as it becomes a data center treasure, more data center contracts are coming one after another.

He explained that Malaysia's cheap electricity and land costs, excellent location close to Singapore, and support from the government have all caused a large number of data center operators to flock to Malaysia, making Malaysia gradually a popular place for data center investment.

“As of April 2024" $TENAGA(5347.MY)$The power supply for 11 data centers has been completed, totaling 1.15 gigawatts. At the same time, 74 power applications have been received, and the total demand exceeds 11 GW.”

🔗 [Read full text]Click to read the full story