Powerwell Holdings Bhd’s (Powerwell) share price has been consolidating sideways and may experience a breakout above RM0.25, with an LT target at RM0.29, according to Malacca Securities.
The research house expected follow-through buying interest to be seen in the near term as the technical readings are positive.
“Monitor for a breakout, targeting between RM0.275 and RM0.28, with an LT target of RM0.29. Support is set around between RM0.24 and 0.245, with a cut loss set around RM0.23,” it said in a Technical Focus note today (Jan 26).
Powerwell, which is principally involved in the design, manufacturing and trading of electricity distribution products, has seen an improvement in quarterly revenue and net profit.
“In 2Q24, the group’s net profit increased to RM2.42 million from RM1.15 million, which is an increase of 109% year-on-year (YoY) on the
back of the stronger revenue of RM40.6 million from RM32.6 million, an increase of 24.5% YoY.
“(This) was mainly due to higher sales generated from project deliveries undertaken by the group during the current financial quarter as compared to the corresponding quarter,” it said.
Malacca Securities said the group also plans to expand its products portfolio and solutions in overseas markets, particularly in Indonesia and Bangladesh.
“The group has established an assembly plant in Indonesia to support business growth in the Indonesian market. The regional expansion should provide a meaningful contribution to the overall revenue of the group.”
Additionally, the independent research house said Powerwell is putting initiatives into cost optimisation, reviewing the production and supply chain processes to mitigate the impact of higher raw material prices.
“This should improve the profit margins and enhance the overall operational efficiency,” it added.
