AmInvestment raises fair value for Power Root to RM2.42

KUALA LUMPUR (Oct 22): AmInvestment Bank Research has maintained its “Buy” rating on Power Root Bhd at RM2.16 with a higher fair value of RM2.42 (from RM2.19) based on an unchanged PE of 18x FY21F EPS, which is in line with Old Town Bhd’s 2-year average forward P/E.

In a note today, the research house said it has increased its earnings forecasts for Power Root for FY20F, FY21F and FY22F by 6.7%, 10.3% and 6.6% respectively as it expect better sales growth and margins for the group.

AmInvestmet said Power Root is experiencing a recovery in export sales as the group restructures its distributorships.

It said the group is leveraging its strong brand image in the Middle East & North African (MENA) region to continue to expand its market share.

It said Power Root’s focus on China is to increase penetration in the online space as the online spending in China is huge.

“The group is expecting further savings from improved production operations processes and plant automation.

“These are envisaged to drive down production costs and wastages. Power Root is continuously introducing new SKUs in order to expand its reach in the market.

Source: TheEdgeMarkets