Newsbreak

• Strategic collaboration with Socomec. PWRWELL, through its wholly-owned subsidiary Powerwell International Sdn Bhd (PISB), has entered into a one-year Strategic Collaboration Agreement with Socomec Innovative Solution (Malaysia) Sdn Bhd to pursue opportunities in the large data centre and hyperscale segment in Malaysia. Under the collaboration, PISB will act as the system integrator for power train units (PTUs) incorporating Socomec’s uninterruptible power supply (UPS) systems. The arrangement is non-exclusive and project-by-project, covering opportunities within the large data centre and hyperscale segment.

M+ Global View

• Expands scope beyond switchgear. We view the collaboration positively, as it broadens PWRWELL’s potential scope within the data centre power infrastructure value chain. By combining PISB’s power distribution and system integration capabilities with Socomec’s UPS solutions and technical support, the collaboration positions PWRWELL to undertake a more integrated PTU scope for large-scale data centre projects.
• Adds another avenue for data centre growth. The announcement is timely, following PWRWELL’s largest-ever contract win of RM190.4m last week, which lifted its unbilled order book to RM459.3m and YTD major contract wins to RM349.2m, representing 91.9% of our RM380m FY27f replenishment assumption. Against this backdrop, we see the Socomec tie-up as supportive of PWRWELL’s longer-term ability to participate in additional data centre projects, while potentially expanding its scope within the power infrastructure package.

Valuation & Recommendation

• Forecast. We maintain our forecasts for now, as specific project opportunities under the collaboration have yet to be publicly announced. We believe the agreement provides opportunities for additional data centre projects and a broader scope of work, but await formal contract awards before incorporating any incremental contributions into our estimates.
• Maintain BUY with TP of RM1.41. Our TP remains based on 20.0x mid-FY28f EPS of 7.07 sen. The Socomec collaboration reinforces our view from the previous update that PWRWELL’s expanding exposure to data centre power infrastructure supports the higher valuation multiple adopted. In particular, the potential to participate in additional projects and undertake a broader PTU scope provides further support to our longer-term growth outlook. With 91.9% of our FY27f order book replenishment assumption already secured, replenishment risk has moderated, while our FY26A–FY29f core earnings CAGR of 26.1% implies a PEG ratio of c.0.8x at 20.0x P/E.
• 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.