PWROOT – Fundamental Analysis (24 Sept 2014)

PWROOT Analysis:-

Excel – http://1drv.ms/1ruhUK6

My View:-

– Fair Value:
  – 10-Y DCF:
    – Base scenario (14%): 2.43 (Fair Value Uncertainty: MEDIUM)
    – Good scenario (18%): 2.95 (Fair Value Uncertainty: LOW)
    – Bad scenario (10%): 2.01 (Fair Value Uncertainty: HIGH)
    – Growth rate applied in Reverse DCF to reach the current stock price (1.95): 9%
    – The historical growth rate of FCF is 17%, so the assumption of 14% growth rate for the next 10 years may be valid.
  – Absolute EY%:
    – Trailing:
      – FY14 (EPS: 0.129) – Fair value 2.21 (Fair Value Uncertainty: MEDIUM)
      – R4Q (EPS: 0.126) – Fair value 2.16 (Fair Value Uncertainty: MEDIUM)
    – Forward:
      – FY15 (EPS: 0.137) – Fair value 2.34 (Fair Value Uncertainty: MEDIUM)
      – FY16 (EPS: 0.145) – Fair value 2.48 (Fair Value Uncertainty: LOW)
    – EPS applied to reach the current stock price (1.95): 0.114
– This company is stable, but hardly to expect high growth in long term. May be a good stock to accumulate during economy recession.
– In my opinion, PWROOT’s ready-to-drink products are not really healthy. I think in long term, people will be more health conscious and consumption of these products may be reduced gradually. Nevertheless, this won’t happen in near future.
– I will place this stock in Watch List and do comparison with its competitors.

Latest Financial – Q1 2015 Financial Report (30 Jul 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1697517

At the time of writing, I did not own shares of PWROOT.

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