We maintain our BUY call on Power Root with a lower FV of RM2.08 (from RM2.20) after trimming FY19F, FY20F and FY21F earnings by 9%, 6% and 11% respectively largely due to lower sales growth estimates. Our FV is based on 15.0x CY19F P/E, which is in line with its historical average P/E.

We came away from a recent visit to the company feeling generally positive. The key highlights are:

1. We believe the company is getting the hang of maximizing its advertising dollar, an on-going effort to boost margins while not eroding its brand value;

2. The company has been able to grow its export markets, mainly the MENA region as planned;

3. At present, input costs are generally in its favour, partially eroded by a weakened ringgit; and

4. It has decided to pass on the higher cost due to the recent implementation of SST to protect its margins.

Others:

Axiata: XL’s capex funding from new IDR5tril bond programme Buy

Bermaz Auto: Another strong quarter Buy

Source: AmInvest Research - 14 Sept 2018