KLCI Stock - NESTLE / 4707 - 2012 Quarter 2

Company Info 

Market Capital (Capital Size)	15,008,000,000 (Very Large)
Par Value	RM 1.00

My Analysis 

Forecast P/E now	(64.0-1.9)/2.1316 = 29.13 (High)
Target Price	49.03+1.9 = 50.93 (PE 23.0, EPS 2.1316, DPS 1.9)
Decision	Not interested unless profit manage to cover high dividend ratio
Comment	Revenue decreased 1.3% and was second consecutive quarter decreasing but still higher than preceding year corresponding quarter 10.5%, eps decreased 23.8% but higher than preceding year correspnding quarter 22.4%, cash generated from operating enough to cover all expenses, gross margin maintain very high, weaker liquidity ratio but still indicate financial strength is good, higher gearing ratio indicate well leverage to generate more income, all accounting of turnover period is good, all segment business still good
First Support Price	61.0
Second Support Price	54.5
Risk Rating	HIGH

Research House

BIMB Target Price	68.7 (2012-09-03)
CIMB Target Price	55.2 (2012-09-03)
Kenanga Target Price	67.5 (2012-09-03)
Maybank Target Price	54.2 (2012-09-03)
OSK Target Price	61.38 (2012-09-03)
MIDF Target Price	59.52 (2012-09-04)
TA Target Price	59.73 (2012-09-04)

Accounting Ratio 

Return on Equity	75.60%
Dividend Yield	2.97%
Gross Profit Margin	33.75%
Operating Profit Margin	12.96%
Net Profit Margin	12.53%
Tax Rate	16.33%
Asset Turnover	2.3856
Net Asset Value Per Share	2.81
Net Tangible Asset per share	2.55
Price/Net Tangible Asset Per Share	25.11
Cash Per Share	0.34
Liquidity Current Ratio	1.0068
Liquidity Quick Ratio	0.5425
Liquidity Cash Ratio	0.0824
Gearing Debt to Equity Ratio	1.9707
Gearing Debt to Asset Ratio	0.6634
Working capital per thousand Ringgit sale	0.1%
Days to sell the inventory	53
Days to collect the receivables	35
Days to pay the payables	93

Technical Analysis 

SMA 10	63.212 (Downtrend)
SMA 20	63.101 (Uptrend 67 days)
SMA 50	60.868 (Uptrend)
SMA 100	57.925 (Uptrend)
SMA 200	55.962 (Uptrend)
MACD (26d/12d)	0.588259 ( 0.053887 )
Signal (9)	0.818617 ( 0.05759 )
MACD Histogram	0.230358 (Bearish trend 6 days)
Bolinger Upper Band	66.694
Bolinger Lower Band	59.508

My notes based on 2012 quarter 2 report (number in '000):-
- Higher revenue and pbt than FY11Q2 mainly due to higher domestic sales but the export sales were flat for the quarter due to the lower demand experienced in some export markets

- The strong domestic sales were driven by the performance of the fast growing categories within the Group's portfolio, in particular Confectionery, Nestlé Liquid Drinks, Chilled Dairy and Ice Cream, which registered a robust double digit growth. The good sales results were due to the continuous investments in consumer communication

- Lower pbt than FY12Q1 largely due to the marketing and promotional activities which were typically more concentrated in the second quarter

- Estimate next 4Q eps after 2012 Q2 result announced = 640860*0.78/234500 = 2.1316, estimate PE on current price 64 = 29.13(DPS 1.9)
- Estimate next 4Q eps after 2012 Q1 result announced = 640860*0.75/234500 = 2.0497, estimate highest/lowest PE = 31.3/24.25 (DPS 1.8)
- Estimate next 4Q eps after 2011 Q4 result announced = 640860*0.64/234500 = 1.749, estimate highest/lowest PE = 31.56/30.3 (DPS 1.8)
- Estimate next 4Q eps after 2011 Q3 result announced = 0.4691*4 = 1.8764, estimate highest/lowest PE = 29.63/24.98 (DPS 1.75)
- Estimate next 4Q eps after 2011 Q1 result announced = 1.7283*1.2 = 2.074, estimate highest/lowest PE = 22.44/21.82 (DPS 1.65)
- Estimate next 4Q eps after 2010 Q4 result announced = 1.6691*0.8 = 1.3353, estimate highest/lowest PE = 36.21/31.94 (DPS 1.65)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.4827*4 = 1.9308, estimate highest/lowest PE = 23.05/20.99 (DPS 1.5)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.4271*4*1.1 = 1.8792, estimate highest/lowest PE = 23.15/20.22 (DPS 1.5)
- Estimate next 4Q eps after 2010 Q1 result announced = 1.56+0.1491+0.0357 = 1.7448(0.1491 from adjustment between 2009 Q1 eps and 2010 Q1 eps, 0.0357 from QbQ improvement adjustment), estimate highest/lowest PE = 23.21/18.52 (DPS 1.5)
- Estimate next 4Q eps after 2009 Q4 result announced = 1.56(around 4% from 1.5002), estimate highest/lowest PE = 22.12/20.54 (DPS 1.5)
- Estimate next 4Q eps after 2009 Q3 result announced = 1.4537, estimate highest/lowest PE = 23.06/21.12 (DPS 1.3)
- Estimate next 4Q eps after 2009 Q2 result announced = 1.4537, estimate highest/lowest PE = 23.65/21.78 (DPS 1.3)
- Estimate next 4Q eps after 2009 Q1 result announced = 1.5264, estimate highest/lowest PE = 21.42/17.82 (DPS 1.3)

NESTLE latest news (English)

NESTLE Latest news (Chinese)

Cocoa price chart