Berjaya Research has assigned NWE Resources Group Bhd a fair value of 29 sen per share, implying 48.8% potential upside from its IPO price, supported by the group’s diversified business model and planned expansion in product development and in-house manufacturing.
The research house valued NWE at 12 times FY2028 forecast core earnings per share of 2.4 sen, a multiple it said is broadly in line with selected Bursa Malaysia-listed peers involved in health food and personal care product distribution.
NWE operates across three business segments: business-to-business hospitality amenities, multi-level marketing distribution of health foods and personal care products, and B2B health food formulation and supply.
Berjaya Research said the diversified structure reduces the group’s reliance on any single business while providing multiple avenues for expansion.
NWE has nearly four decades of experience supplying hospitality amenities to four- and five-star hotels and resorts, supported by long-standing relationships with established operators.
Its M-Plan multi-level marketing business has also operated for about 30 years and has 7,309 active distributors, offering a range of health food and personal care products.
The research house said selected halal-certified products further broaden the group’s addressable market.
NWE plans to use part of its IPO proceeds to develop six new health food formulations and five personal care formulations, while expanding in-house research and development and manufacturing capabilities.
The group also plans to establish a new M-Plan sales office in Johor.
Berjaya Research said investments in blending, packaging and laboratory equipment should improve quality control, production efficiency and product development capabilities.
Greater vertical integration could also reduce NWE’s dependence on outsourced manufacturing and help support margins over the longer term.
The research house expects the combination of established customer and distributor networks, proprietary formulations and increased manufacturing capabilities to underpin sustainable earnings growth.
