While financial performance has dropped since I bought the shares last year, I suspect it is a short term thingy. The business of coffee is quite competitive but somehow, many of them are able to play according to the rule i.e. not let the prices goes too low and in the event caused everyone to suffer financially. The Oldtown's sale is a good example as it shows that there are value for this business. I suspect the value for Oldtown comes from its ready coffee mix business rather than the coffee chain business.
I have decided to buy (as below) when it dropped as I deemed it as an opportunity.
This business is not a "moat", however I suspect Power Root has its inherent strength as well. The lower profits in the last one year is probably of its expansion costs as one can also noticed that its foreign business is now bigger than local sales.
KLCI King
Felicity first bought @ RM2.35 one year ago, now top up more @ RM1.34.
I don't think it is a good business because PWRoot do not have solid moat as compared to Nestle & Old Town.
Compared to Old Town, PWRoot oversea's expansion growth is not as good as what expected and it's brands do not command better market perception than OLD TOWN.
I won't go for PWRoot but rather OLD TOWN, but sadly OLD TOWN is going to be privatised.
(27 Mar 2018) Bought more Power Root - felicity
http://klse.i3investor.com/blogs/kianweiaritcles/152023.jsp
(13 Apr 2017) Sold some Insas and Bought Power Root - felicity
http://klse.i3investor.com/blogs/kianweiaritcles/120572.jsp
2018-03-28 11:20