Affin Daily Insight (LV) - 21 April 2014 - NESTLE / CIMB / DMR

Top Calls

Company Update � Nestle (ADD, maintain) - Fundamentals remain intact We attended Nestle�s 1QFY14 analyst briefing last Friday and remain positive on the company�s prospect. Domestic sales grew by a commendable +9.2% yoy to RM1bn while export sales declined by 12.8% yoy to RM260m. We gathered that Nestle�s affiliated companies such as Indonesia and the Philipines had trimmed down their imports from Nestle Malaysia as these countries had invested and produced their products locally. Management have guided for a higher CAPEX of RM280m which is within our projection in FY14. This is c.RM80m higher than FY13�s CAPEX of RM203m. The CAPEX will be utilize to: 1) construct the manufacturing plant on the piece of land next to its current Shah Alam Manufacturing Complex; 2) expand its �Ready to Drink� production lines (e.g Milo, Nescafe) in Sri Muda; and 3) expand its confectionery line (eg. Kit Kat) due to strong demand from domestic market. Overall, we continue to like Nestle for its strong brand name. We also like that demand for Nestle�s products are fairly resilient in nature. Maintain ADD and DDM-derived TP at RM72.05.

Other Calls

Flash Note � CIMB Group (ADD, maintain) - CIMB Thai: 1QFY14 boosted by robust operating income

Debt Market Research - Quiet ahead of the Easter weekend

Morning News & Market Summary

For important disclosures, please refer to the Disclosure section at the end of the individual linked research reports.

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