Background: Nestle (Malaysia) Berhad is a Malaysia-based nutrition, health and wellness company. “But why milo so sweet ah? And why is kit kat healthy🤔”

The Company’s segments include Food and beverages, and Others, which include Nutrition and Nestle Professional.

💨 Consensus Target Price RM127.05
💨 Difference- RM18.25
💨 Potential Gain/Loss (%) -12.56%
💨 Consensus Date 30 Aug 2019

📌 Subsidiaries
📎 Nestle Products Sdn. Bhd – engaged in marketing and sales of ice-cream, powdered milk and drinks, liquid milk and juices, instant coffee and other beverages, chocolate confectionery products, instant noodles, culinary products, cereals, yogurt and related products

📎 Nestle Manufacturing (Malaysia) Sdn. Bhd – engaged in manufacturing and sales of the above listed products

📎 Nestle Asean (Malaysia) Sdn. Bhd – engaged in the manufacturing and sale of chocolate confectionery products.

Their main source of revenue comes from the domestic market, representing approximately 80% of total sales. Some hot 🔥 products that nestle sells are:-
✔️ Milo
✔️ Maggie
✔️ Kit Kat
✔️ Smarties
✔️ Nescafe

The main geography is the domestic market, 🇲🇾 representing approximately 80% of total sales.

Nestle’s profit after tax grew by 8.2% year on year in Q3 2019 compared to Q3 2018, it grew to RM149 million which is a solid growth. 📈 They have increasing domestic growth with strong sales numbers, successful product innovations and marketing activities.

Dividend of RM0.70 cents per share 💵 is also declared in their Q3 2019 quarterly report which is the same amount as they gave also back in Q3 2018, nothing surprising about this.

Nestle’s profit before tax also grew by 2.6% in Q3 2019 comparing against their Q3 of 2018. However Nestle Malaysia’s turnover for Q3 2019 reduced by 🔻 2.2% to RM1.4 billion which shows that this year would be a challenging year for exports against a backdrop of global uncertainties. 🤷‍♂️

In terms of their Balance sheet their assets reduced from 2.8 billion to 2.7 billion but also their liabilities reduced from 1.78 billion to 1.69 billion and almost 1 billion decreased. 🔻

💰 Cashflow from operating activities decreased -47.81%, a very huge decrease compared to Q3 2018 around 368 million decrease 📉, this is mainly due to movement in working capital and income tax paid which is higher in Q3 2019 as compared to previous year’s same quarter.

Also their cash and cash equivalents at the end of the quarter at 30 September 2019 also decreased significantly from 157 million to just 21 million, -86.53% decreased in cash.


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