KUALA LUMPUR: Rakuten Trade Research expects further upside in MN Holdings Bhd's stock after it broke out from the one-week bullish flag pattern on Tuesday.
With the stock hitting a new 52-week high, Rakuten said it coincides with the 20-day exponential moving average (EMA) staying above the 50-day EMA since the bullish crossover in September, hence signaling a continuation of the ongoing uptrend.
"We expect the rising momentum to steer the stock higher and test the next level of resistance of 67 sen (R1) and 72 sen (R2) in the near term," it said in a technical note today.
On the downside, Rakuten said the stop-loss is set at 54 sen, below the 50-day EMAs.
Fundamentally, it said MN Holdings is positioned to thrive amidst Malaysia's expanding data centre industry.
"In addition, the company is strategically positioned to harness rising demand for power infrastructure, supported by initiatives such as the National Energy Transition Roadmap (NETR) and Tenaga Nasional Bhd's (TNB) capital expenditure plans under RP3 and RP4," it added.
In January, MN Holdings bagged a RM98 million contract to undertake high-voltage horizontal directional drilling and cable bridge works for a data centre located in the southern region of Peninsular Malaysia.
The contract, awarded to its wholly-owned subsidiary Mutu Nusantara Sdn Bhd, spans a tenure of 13.5 months, effective December 1, 2023.
Despite the customer withholding information consent, MN Holdings expects the contract to make a positive contribution to the group's net assets and gearing throughout the contract period.
