KUALA LUMPUR: RHB research expects Power Root Bhd
's 4QFY19 core net profit to come within forecast although headline numbers could be impacted by one-off provisions.
The research house maintained its buy call on Power Root with a target price of RM2.02
In a note, RHB said Power Root is scheduled to report its quarterly results on May 28 where core net profit is expected to come in within its and consensus estimates of RM7-8mil, bringing FY19 core net profit to RM30-31mil.
"However, considering the group had several year-end writedown/impairments totalling >MYR6m in 4QFY18, we are not ruling out the possibility of one-off exceptional items being booked in 4QFY19," it said.
Dividend per share is expected to be declared, taking FY19 total payout to seven sen per share.
RHB expects Power Root to sustain its growth momentum and record net profit growth of 17% in FY20, driven mainly by favourable commodity prices and stabilisation in sales following the moderation of A&P expenses in FY19.
"Power Root’s balance sheet is likely to remain robust, considering the healthy cash flow generation and minimal capex needs.
"As at end-3QFY19, the group’s net cash was MYR26m. This should allow it to maintain a high dividend payout ratio going forward," it said.
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