Thursday 28 Mar 2024
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KUALA LUMPUR (April 27): Beverage maker Power Root Bhd's share price rose to its highest in about a year at RM1.56 at the afternoon break on Wednesday (April 27) as the company accelerated its share buy-back, which was resumed in March 2022.

At 12.30pm, the counter settled up one sen or 0.65% at RM1.56 after trading at between RM1.52 and RM1.57 in the morning session, with 601,500 shares transacted. At RM1.56, Power Root is valued at about RM647.18 million based on its 414.86 million outstanding shares.

The stock has been in an uptrend since it closed at RM1.25 on March 8.

Its share price was last at the high of RM1.56 at the close on May 31, 2021.

After an almost three-month break from Dec 16 last year, Power Root resumed its share buy-back on March 7 and then accelerated it, according to the company's filings with Bursa Malaysia.

The latest-reported share buy-back happened on Tuesday, when the company purchased 484,500 shares on the open market for RM754,496.51 or RM1.54 to RM1.56 a share.

Following the purchase, its cumulative net outstanding number of treasury shares stood at 15.1 million.

Previously on March 7, Power Root said its cumulative net outstanding number of treasury shares stood at 9.86 million after it bought back 58,000 shares for RM74,405.95 or RM1.27 to RM1.28 per share.

In a new development on Wednesday, RHB Investment Bank Bhd analyst Soong Wei Siang upgraded the research house's recommendation for Power Root shares to "buy" from "neutral", with a higher target price (TP) of RM1.88 from RM1.33 previously.

"Power Root’s earnings down-cycle is approaching the tail end as we forecast an 87% net profit growth in FY23 (the financial year ending March 31, 2023), underpinned by export recovery, margin normalisation on price increases, robust local sales momentum and continuous efficiency gain.

"We also like Power Root for its rewarding dividend yield of [more than] 5%, its established brand equity across operating markets, and its efficient and hungry management team," Soong wrote in a note.

According to him, RHB revised higher its TP after raising its FY22 to FY24 earnings forecasts by 13% to 21% for Power Root.

"Risks to our recommendation include a sharper-than-expected hike in commodity prices and slower-than-expected export recovery," he noted.

Edited ByChong Jin Hun
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