KUALA LUMPUR (Nov 28): Nestle (M) Bhd reached its record high during morning trade today at RM94.40, as it rose as much as 1.5% on its inclusion to the MSCI Global Standard Index commencing on Nov 30.
MIDF Research in its strategy note today pointed out that Nestle, the highest-priced stock in Bursa Malaysia, will be added to the MSCI Global Standard Index, as the index went through a semi-annual rebalancing exercise. This has contributed to the positive sentiment on Nestle shares.
As at 12.29pm, Nestle shares were up 10 sen or 0.11% at RM93.10, with 105,300 shares done.
Nestle shares have shown tremendous growth over the years. Year-to-date, the stock has risen 20.4%, whereas in the last five years, it has grown 56%.
The Edge Malaysia weekly in its latest issue, reported Nestle shares having grown 1707% since Sept 1, 1998, which means for someone who had bought 1,000 Nestle shares on that day for RM5,089, today the shares would worth RM91,980.
"Over the period, Nestle paid RM28,349 in net dividends (RM30,443 gross dividends), according to Bloomberg data," the weekly added.
The growth has been supported by Nestle's strong financial performance throughout the years. According to its annual report for the financial year 2016, the group's revenue hit a record high of RM5.064 billion, increasing by 4.7% from the previous year, to cross the five billion mark for the first time.
Its net profit have been steadily increasing since 2012, growing 26.1% since then to achieve RM637 million in FY16.
Earlier this month, Nestle posted its financial results for the third quarter ended Sept 30, 2017 (3QFY17), where stronger domestic and export sales pushed its revenue up 4.77% year-on-year to RM1.32 billion, from RM1.26 billion.
The growth momentum for domestic and export sales were at 4.2% and 6.8% respectively.
However, net profit fell 25.5% to RM 119.75 million, from RM160.71 million in 3QFY16.
Analysts have generally remained positive on the outlook for Nestle for the rest of the year, as profitability is expected to pick up in 4QFY17.
Kenanga Research in its note last week maintained its 'Market Perform' call on Nestle, with a higher target price of RM86.90, from RM81.10 previously.
"The group has been consistent with further developing its brand equity through the introduction of new products and revamping existing brands to continually expand its market share. While near-term prospects could still be clouded by ongoing cost concerns, the group is weathering these challenges well," the research house said.