Newsbreak

• Largest-ever contract win. PWRWELL has secured a landmark contract comprising two purchase orders worth a combined RM190.4m from a returning multinational customer. The contract involves the supply and delivery of low-voltage switchgear and related equipment for a data centre project in Johor, with deliveries spanning FY27f–FY28f and completion targeted by 4Q28. This represents the largest contract award in PWRWELL’s history, lifting its unbilled orderbook to an all-time high of approximately RM459.3m, from RM268.9m as at end-June 2026.

M+Global View

• Strengthens data centre credentials. We view the latest contract win positively, as it further strengthens PWRWELL’s positioning in data centre-related power distribution equipment. The award from a returning multinational customer also reinforces PWRWELL’s execution track record and ability to secure repeat business within the data centre segment.
• Orderbook replenishment largely de-risked. The latest award brings PWRWELL’s major contract wins YTD to RM349.2m, representing 91.9% of our RM380m orderbook replenishment assumption, with only c.RM30.8m remaining. With a substantial portion of our assumed replenishment now secured, earnings visibility into FY27f–FY28f has improved materially. Meanwhile, the enlarged RM459.3m unbilled orderbook provides revenue cover of c.2.9x FY26 revenue, versus c.1.7x based on the RM268.9m orderbook as at end-June 2026. This provides a stronger foundation for sustaining PWRWELL’s higher revenue base, while further order wins would represent upside to our current forecasts.
• Capacity expansion supports execution. We view the ongoing manufacturing expansion as timely in supporting the enlarged orderbook. Greater in-house production capacity should reduce reliance on outsourcing and improve operating leverage as utilisation ramps up from FY28f.

Valuation & Recommendation

• Forecast. Maintained as the latest contract falls within our existing orderbook replenishment assumption.
• Upgrade to BUY with a TP of RM1.41. We raise our target P/E multiple to 20.0x from 17.0x, applied to our mid-FY28f EPS of 7.07 sen, deriving a target price of RM1.41. The higher multiple reflects improved earnings visibility and reduced orderbook replenishment risk following the latest contract win, alongside PWRWELL’s strengthening exposure to data center power infrastructure. With 91.9% of our FY27f orderbook replenishment assumption already secured, we believe the previous execution discount is less warranted. PWRWELL also offers an attractive growth-to-valuation profile, with our FY26A–FY29f core earnings CAGR of 26.1% translating into a PEG ratio of c.0.8x at 20.0x P/E, further supporting the valuation re-rating.
• Downside risks. Risks to our recommendation include: (i) slower-than-expected contract replenishment, (ii) delays in project delivery or customer acceptance, and (iii) foreign exchange volatility.