Fund Manager Summary
The fund managers believe that PWR Holdings Ltd presents a compelling investment opportunity due to its leadership in cooling technology for both automotive and aerospace applications. In their opinion, the company’s consistent organic growth and high returns on invested capital (ROIC) highlight its resilience, despite recent challenges related to a significant facility relocation that may impact short-term profit growth. The fund managers note that PWH’s share price has reacted negatively to these developments, dropping from a high of $12 to around $9.05, reflecting the market’s sensitivity to perceived disappointments, especially given its high P/E multiple of over 30. However, they emphasize the founder’s substantial ownership stake and commitment to long-term returns, suggesting that PWH is well-positioned to capitalize on the increasing demand for advanced cooling equipment as electrification trends evolve.
Source: Trading View
Commentary From The Managers
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Elston Asset Management
30 Sept 2025
$7.77
Summary
- PWR Holdings Ltd. has transitioned from the Australian automotive radiator industry to a global leader in advanced cooling solutions for motorsports.
- Key customers include Red Bull Racing and McLaren, showcasing the company's quality and market leadership.
- PWR serves all F1 teams and various professional racing leagues, indicating a broad market presence.
- Founded in 1997 by Kees Weel and his son Paul, PWR capitalized on the demand for lightweight aluminum cooling products.
- The company's breakthrough moment came at the Bathurst 1000, leading to rapid growth and a diverse customer base.
- PWR's sales are categorized into Motorsports, OEM, Aftermarket, and Aerospace & Defence (A&D).
- The A&D sector is rapidly growing, overtaking OEM and Aftermarket in revenue contributions.
- PWR's management is focused on expanding A&D, supported by a new, larger facility in Stapylton, Queensland.
- High expectations for growth in A&D are backed by a strong history in motorsports.
- PWR has achieved approved supplier status for 46 customers, a significant increase from 11 the previous year.
- Historically, PWR has maintained 20% after-tax profit margins, with expectations for a rebound post-facility move.
- The company's balance sheet remains strong, with manageable debt levels and a record after-tax profit of $25 million in FY24.
- Potential risks include new competition, technological advancements, and de-globalization in A&D.
- PWR adds defensive revenue streams to the portfolio, with a strong balance sheet that mitigates debt-related risks.
- Despite recent challenges, PWR is seen as a high-growth business with strong potential for earnings growth as margins stabilize.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Elston Asset Management
30 Sept 2025
$7.77
- PWR Holdings Ltd. has transitioned from the Australian automotive radiator industry to a global leader in advanced cooling solutions for motorsports.
- Key customers include Red Bull Racing and McLaren, showcasing the company's quality and market leadership.
- PWR serves all F1 teams and various professional racing leagues, indicating a broad market presence.
- Founded in 1997 by Kees Weel and his son Paul, PWR capitalized on the demand for lightweight aluminum cooling products.
- The company's breakthrough moment came at the Bathurst 1000, leading to rapid growth and a diverse customer base.
- PWR's sales are categorized into Motorsports, OEM, Aftermarket, and Aerospace & Defence (A&D).
- The A&D sector is rapidly growing, overtaking OEM and Aftermarket in revenue contributions.
- PWR's management is focused on expanding A&D, supported by a new, larger facility in Stapylton, Queensland.
- High expectations for growth in A&D are backed by a strong history in motorsports.
- PWR has achieved approved supplier status for 46 customers, a significant increase from 11 the previous year.
- Historically, PWR has maintained 20% after-tax profit margins, with expectations for a rebound post-facility move.
- The company's balance sheet remains strong, with manageable debt levels and a record after-tax profit of $25 million in FY24.
- Potential risks include new competition, technological advancements, and de-globalization in A&D.
- PWR adds defensive revenue streams to the portfolio, with a strong balance sheet that mitigates debt-related risks.
- Despite recent challenges, PWR is seen as a high-growth business with strong potential for earnings growth as margins stabilize.
Summary
Oracle Advisory Group
31 Dec 2024
$7.86
- PWR Holdings Ltd. (PWH) is identified as one of the highest quality companies in the Small Ords index.
- The company has historically commanded a premium valuation.
- Valuation has recently pulled back as PWR undergoes an investment cycle, upgrading facilities to expand capacity for growth.
- Profits are projected to compress in FY24 and remain subdued in FY25.
- Once the high investment period concludes, strong growth is anticipated.
- Oracle Advisory Group continues to hold, anticipating that the premium valuation will return post-investment cycle.
Summary
Naos Asset Management
31 Dec 2024
$7.86
- Naos Asset Management notes underwhelming guidance from PWR Holdings Ltd (PWH) for FY25, with a subsequent downgrade impacting outlook.
- Revenue is projected to decline -3.6% YOY for 1H FY25, with NPAT expected between $3.2-$3.7 million compared to $9.8 million in 1H FY24.
- Downgrade influenced by costs related to relocating their major manufacturing facility on the Gold Coast.
- Concern arises from weak performance in the Original Equipment Manufacturer (OEM) division, with anticipated revenue drop of -44%.
- PWH has no active OEM contracts related to Electric Vehicle (EV) products following cancellations of several contracts.
- Global demand for EVs has decreased due to consumer issues like high costs and poor infrastructure.
- Some manufacturers, including Volkswagen, are consolidating operations due to the decline in EV demand.
- PWH anticipates strong medium to long-term demand for aerospace products, evidenced by 67.1% revenue growth in 1H FY25.
- FY25 and FY26 expected to be transitional years due to facility upgrades.
- Naos Asset Management has reduced its investment in PWH to reallocate capital towards more promising opportunities.
- Continued observation of PWH’s potential in the defence and aerospace market, particularly in North America.
Summary
Naos Asset Management
30 Sept 2024
$9.05
- PWH is a leader in cooling technology for automotive and aerospace applications.
- They supply cooling equipment to all but one Formula One team.
- All products are manufactured in company-owned sites in Australia, the UK, and the US.
- PWH has scaled at a rate of 10-20% p.a., necessitating facility expansions.
- Plans for a larger, purpose-built facility in Gold Coast were outlined during FY24 results.
- Expect minimal or negative profit growth in FY25 due to relocation complexities.
- Company is currently trading at a P/E multiple of >30 times, leading to significant share price reactions.
- Despite short-term impacts, PWH has a track record of consistent organic growth and high returns on invested capital (ROIC).
- The founder and CEO, a majority shareholder with >10% ownership, supports the long-term project.
- Transition to electrification is expected to increase demand for advanced cooling equipment.
- Naos Asset Management continues to hold due to PWH's positioning to secure significant contracts.
Summary
Smallco Investment Manager
30 June 2024
$10.94
- PWR Holdings Ltd. reported results and outlook that were softer than anticipated.
- Results impacted mainly by increased underlying cost pressures from higher wage inflation.
- The company is executing a significant expansion of its manufacturing capacity.
- This expansion is in anticipation of a large increase in demand for advanced cooling products.
- New use cases are expected in the Aerospace and Defence sectors.
- There is uncertainty surrounding the timing of demand ramp-up from these sectors.
- This uncertainty presents near-term earnings risks.
- However, if demand develops as expected, it could lead to strong growth in earnings in the long term.
- Smallco Investment Manager continues to hold its position in PWR Holdings Ltd.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"Navigating the turbulent waters of growth, PWR Holdings seems poised for a transformative leap, even if short-term profits take a hit. With a founder at the helm and a booming demand for cooling tech, the long game could yield substantial rewards."
Last Updated: 30 Sept 2025
Query The Data
Frequently Asked Questions
Who is investing in PWR Holdings Ltd (ASX:PWH)?
Fund managers including Naos Asset Management, Oracle Advisory Group, Smallco Investment Manager and Elston Asset Management have invested in PWR Holdings Ltd (ASX:PWH).
Why do fund managers invest in PWR Holdings Ltd?
Fund managers invest in PWR Holdings Ltd due to its leadership in cooling technology for automotive and aerospace applications, evidenced by its long-standing relationships with Formula One teams. Despite short-term challenges related to facility relocation impacting profits, PWR has demonstrated consistent organic growth and high returns on invested capital. The founder's significant ownership aligns with a commitment to long-term success, while the shift towards electrification is expected to drive increased demand for advanced cooling solutions, positioning PWR favorably for future contracts.
What happened to PWR Holdings Ltd (ASX:PWH)?
Fund managers are investing in PWR Holdings Ltd due to its established position as a leading provider of advanced cooling solutions in the motorsports industry, serving all Formula 1 teams and various other professional racing leagues. The company has a strong track record of innovation and quality, evidenced by its extensive client base, including championship-winning teams. PWR's expansion into adjacent sectors like Aerospace & Defence (A&D) is promising, with significant revenue growth potential as it leverages its reputation for high-quality products and fast turnaround times. The management's focus on profitable growth and maintaining robust profit margins further enhances its investment appeal, supported by a solid financial position and a strong balance sheet.