Power Root Bhd

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This is the new investment item in my portfolio.

The main products of Power Root are instant premixed coffee and energy drink. From what we could observed in the hypermarket, I think it's fair enough to say that Alicafe series is now the top local brand in the premixed coffee market. Its Power Root series also had a significant market share in the energy drink segment.

Historical data of the company:

	RM million
FY*	Revenue	PAT
2007	154.0	34.7
2008	178.5	39.3
2009	138.1	9.8
2010	153.1	10.2
2011	184.8	12.2
2012	217.0	16.7

     * FY ended 28-Feb each year.

Its performance had dropped significantly in FY2009. However, the company manage to recover from the economic crisis, and had shown a CAGR of more than 12% during FY2009~2012.

Segmental Data:

	RM million				%	%
FYE	Local	Export	Total		Local	Export
2008	159.4	19.0	178.5		89	11
2009	118.9	19.2	138.1		86	14
2010	133.7	19.4	153.1		87	13
2011	155.0	29.8	184.8		84	16
2012	170.8	46.2	217.0		79	21

We can see that the company's performance in the past few years were partially boosted by the export market. Its export revenue had become more than doubled within two years time from FY2010~2012.

While I'm confident that Power Root could maintain its market share (with mild growth) in local market, I'm in opinion that its growth momentum in the export market will remain strong for the years to come.

Its dividend record:

• 2008： 5.0 sen.
• 2009： 4.0 sen.
• 2010： 6.0 sen.
• 2011： 4.0 sen.

based on the current share price of RM0.52, the average DY is about 10%. I believe that this dividend rate will be maintained in the coming years.

In short, my reasons of investing in Power Root -- riding on its growth momentum (my estimation, 10~15% p.a.), at the same time receiving its high dividend.

Shares bought recently.

New fund of RM14k had been injected into my portfolio recently.

1. bought 500 shares of PPB.

This is a new investment item in my portfolio.

while buying into PPB, i'm actually aiming to ride on the growth momentum of Wilmar International. (buying 1 share of PPB is equivalent to holding 1 share of Wilmar indirectly).

Wimlar had been growing fast in past few years (see here), and i'm in an opinion that this growing trend will persist for some years in the future. While the growth momentum mostly come from M&A and business restructuring, the economical growth in China and India are giving strong support to its existing business.

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2. bought 3000 shares of Notion.

Surprisingly, the flood of Thailand do bring some positive impact on Notion. It's thus facing a strong rebound in the coming quarters. At the same time, orders from new customers are kicking in, boosting its performances to higher level.

currently, Notion is the 2nd largest investment in my portfolio.

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My Portfolio at the end of 2011.

Activities during the year：

• stock sold: none。
• stock bought: Notion-wa, XDL.
• new fund added: RM10,500.

Gloves companies are still my favorite, and thus make up the highest weight in my portfolio. Their share price are quite steady during 2011. While the sharp increase in share price of AirAsia and TSH were beyond my expectation, the performance of Notion, XDL and the net-working-capital portfolio were quite disappointed.

the return rate of my portfolio in year 2011 was 0%, not much different from KLCI's performance.

Notion-WA.

Bought in 10,000 unit of Notion-Wa today.

Not quite understand the reason behind its sudden-drop for this two days. Bought it because I feel that the price is attractive.

Need to pump-in RM4000 of new fund into my portfolio for this transaction. Now, the Notions had overtake AirAsia to become the 2nd largest holding in my portfolio, weight around 16%.

Shares Bought in May.

Recent activities：

• Inject RM3500 of new capital into my portfolio.
• Bought 5000 units of XDL.
• Bought 4000 units of Notion-Wa.

Currently, the weight of each items in my portfolio is:

• Glove makers: 27% (Harta + Kossan)
• AirAsia: 17%
• Notion: 14% (mother share + warrant)
• TSH: 11%
• XDL: 11%
• value-stocks: 20% (ten stocks in total)

Among the stocks in the portfolio, I think Notion will be the best performer at the year end. According to its management, the 2.5" HDD orders will start kick-in next quarter. Surely, they will have great contribution to both top & bottom lines of Notion.

This year until now, I had already pump-in RM6.5k into my portfolio. According to my saving plans, there will be another RM11.5k of new capital to be injected during the remaining of this year. Hope that I could find good suspects for those new fund then.

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