PETALING JAYA: Powerwell Holdings Bhd
’s medium-term growth outlook remains positive, supported by its exposure to data centre (DC) infrastructure, Siemens low-voltage (LV) and medium-voltage (MV) licensing, the acquisition of Tenaga Kenari and expansion in Indonesia, according to Apex Securities Research.
However, the research house downgraded Powerwell to a “hold” from “buy” while maintaining its RM1.10 target price, citing valuation concerns following the stock’s recent rally.
Apex Research said the downgrade was a valuation-driven downgrade, not a change in view, as the share price had moved closer to its target price ahead of further operational updates.
Apex Research pointed out that Powerwell’s share price had rallied about 16.3% since the research house initiated coverage on July 30, reaching a fresh 52-week high of RM1.05 intraday on Aug 17 before closing at RM1.03.
The stock has closed most of the gap to the RM1.10 target price in a matter of weeks, well ahead of any incremental news flow on the group’s operations, it explained.
Despite the valuation-driven downgrade, Apex Research remains constructive on Powerwell’s longer-term prospects.
It sees Malaysia’s DC build-out and the broader regional artificial intelligence infrastructure investment cycle as key structural growth drivers.
The research house believes Powerwell’s full LV and MV Siemens licensing and 40-year execution track record differentiate it from smaller, less-certified peers.
The Tenaga Kenari acquisition is also expected to provide a second earnings engine in Sabah and Sarawak, while the planned doubling of Indonesian manufacturing capacity from the third quarter of 2026 extends the group’s growth runway beyond its Malaysian core.
Apex Research made no changes to its earnings forecasts pending Powerwell’s upcoming first quarter of financial year 2027 (FY27) results.
The research house said the results would be important in assessing earnings delivery, margin progression and order execution.
Moreover, the research house forecast revenue to rise from RM159mil in FY26 to RM276mil in FY27, while core net profit is projected to increase from RM24.1mil to RM43.7mil.
Core earnings per share are forecast to rise from 4.15 sen to 7.53 sen over the same period.
Powerwell’s balance sheet is expected to remain strong as well, with the group forecast to maintain a net cash position throughout FY26 to FY29.
Its dividend per share is projected to increase from 1.5 sen in FY26 to 2.48 sen in FY27 and 3.2 sen in FY29.
