Powerwell Holdings Berhad -Data Centre Boom Sparks a Record-Breaking Start to FY27
Fri, 28-Aug-2026 07:32 am
by Research Team • Apex Research

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PWRWELL (0217)

Target Price (RM)

1.10

Recommendation

Hold

PWRWELL’s 1QFY27 core net profit rose of RM9.7m (+119.1% YoY, +53.0% QoQ) results are deemed in line, accounted for 22% of our FY27F forecast and 27% of consensus estimates.

We remain positive on the Group's medium-term outlook, underpinned by a record RM268.9m order book (as at 30 June 2026) and sustained data centre capex momentum, though near-term margins are normalising from an elevated base.

No changes on our FY27F/FY28F/FY29F core net profit forecasts of RM43.7m/RM51.1m/RM56.3m.

We maintain HOLD with an unchanged TP of RM1.10, based on an unchanged 16.2x PE multiple applied to a blended FY27F-FY28F core EPS estimate of 6.8sen.

 

Results inline. PWRWELL’s 1QFY27 core net profit of RM9.7m, after adjusting for a net forex loss of RM0.1m and ESOS-related expenses of RM0.6m, was in line with expectations, representing 22.2% of our FY27F core net profit forecast and 27.0% of consensus estimates.

QoQ. Revenue surged 113.0% QoQ to a record RM88.3m from RM41.4m in 4QFY26, driven by billings from several data centre projects and the maiden consolidation of the newly acquired Tenaga Kenari group of subsidiaries (49% equity interest in Tenaga Kenari Sdn Bhd and Tenaga Kenari Marketing Sdn Bhd, completed 1 April 2026). With that, core net profit increased 53.0% QoQ to RM9.7m from RM6.4m.

YoY. Revenue jumped 145.6% YoY to a record RM88.3m (1QFY26:RM36.0m), again driven by data centre project billings and the Tenaga Kenari contribution. Core net profit rose 119.1% to RM 9.7m (1QFY26:RM4.4m), powered by higher billings from several data centre projects that were delivered and accepted in the quarter.

Cash flow. Operating cash flow turned negative at RM11.2m in 1QFY27 (1QFY26: +RM10.9m), mainly due to higher inventories and receivables as the Group stocked up materials to support its stronger order pipeline. We view this as a near-term working-capital requirement, with cash conversion expected to improve as projects progress and inventories are converted into sales.

Outlook. We remain constructively positive on the 1HFY27 outlook, underpinned by a record RM268.9m order book as at 30 June 2026, anchored by the Group's largest-ever single contract worth RM158.8m secured in June 2026. The Group is well positioned to ride continued tailwinds from the data centre, renewable energy, semiconductor and infrastructure sectors, supported by a promising tender pipeline and ongoing capacity expansion.

Earnings Revision. We maintain our FY27F/FY28F/FY29F core net profit forecasts of RM43.7m/RM51.1m/RM56.3m, with no changes to our earnings assumptions.

Valuation & Recommendation. We maintain HOLD on with an unchanged TP of RM1.10, based on an unchanged PE multiple of 16.2x applied to a blended FY27F-FY28F core EPS estimate of 6.8sen.

Risks. Slowdown in project awards, lower margins due to jobs outsourcing, higher expansion costs, electricity supply constraints or regulatory changes affecting data centre developments.

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