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Research by Maybank
Hold – TP RM120.00

“Feeling the bite of rising costs"

2Q24 results fell below our expectations on higher-than-expected raw material costs. With EPF Account 3 withdrawal and product price hikes coming through in 3Q24, this may mitigate further earnings downside in 2H24 despite expectations for subdued consumer sentiment to persist. Nevertheless, our FY24E-FY26E earnings estimates are lowered by 11%-28%. Rolling forward our valuation base year to FY25E, we derive a lower DCF-TP of MYR120.00 (WACC: 6.3%, LT growth: 2.5%).

Analyst:
Jade Tam
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$KLSE-NESTLE
Research by Maybank
Hold – TP RM120.00

“Feeling the bite of rising costs"

2Q24 results fell below our expectations on higher-than-expected raw material costs. With EPF Account 3 withdrawal and product price hikes coming through in 3Q24, this may mitigate further earnings downside in 2H24 despite expectations for subdued consumer sentiment to persist. Nevertheless, our FY24E-FY26E earnings estimates are lowered by 11%-28%. Rolling forward our valuation base year to FY25E, we derive a lower DCF-TP of MYR120.00 (WACC: 6.3%, LT growth: 2.5%).

Analyst:
Jade Tam
jade.tam@maybank-ib.com

$NESTLE / 4707 (NESTLE (MALAYSIA) BERHAD)