A quiet corner of the Australian sharemarket has experienced significant growth this year, with investors channelling funds into companies constructing the electrical infrastructure crucial for an electric future. Shares in electrical services firms such as SKS Technologies, Southern Cross Electrical Engineering, and GenusPlus have climbed between 20 per cent and 80 per cent since the start of the year. This contrasts sharply with the broader market, where the S&P/ASX Small Ordinaries Index has seen a 7.5 per cent decline, while the ASX’s top 20 companies recorded a 6 per cent jump.
These small-cap standouts are underpinned by the artificial intelligence revolution and the burgeoning data centre boom. The recent spike in oil prices, attributed to the war in Iran, has further accelerated this rally by intensifying demand for electric vehicles. Shaun Weick, a deputy portfolio manager at Wilson Asset Management, noted that the market is recognising businesses with tailwinds from the electrification theme, stating that the conflict has amplified these trends across the commodity complex, from lithium to downstream data centres and electrical cabling. GenusPlus, for instance, focuses on transmission wiring and grid upgrades, essential for modernising Australia’s power grid.
This appetite for infrastructure investment is echoed by other market participants. Jackson Aldridge, a portfolio manager at Regal Funds Management, highlighted Maas Group, a company better known for its quarry business which it recently sold for $1.7 billion. Maas Group is now pivoting towards electrical work and has secured a contract to build modular electrical systems for an AI project in Tasmania. Pendal’s Patrick Teodorowski, co-portfolio manager of a smaller companies fund, has also built positions in similar firms, including Southern Cross Electrical, seeing its role in the nation’s high-tech transition as significantly undervalued by the market.
