NESTLE LANKA PLC (NEST.N0000)

http://www.cse.lk/cmt/upload_report_file/487_1298863907850.pdf

About 50% growth. Share price hasn't budged. How did the manipulators miss this one? As we have seen so far this year; when there is 50% YoY growth share price jumps 250% before the announcement

How did you calculate 50% growth? I see only about 10%.

wis wrote:How did you calculate 50% growth? I see only about 10%.

In my book it's the quarterly report you should look at, the year to date figures include results that have been previously released and therefore reflected in the share price.

for the quarter it's : (7.85 - 5.24) / 5.24 = 0.498091603 rounds to exactly 50%

By Azhar Razak

Nestlé, the world’s leading nutrition, health and wellness company says it plans to invest more than 2 billion rupees in 2011 in Sri Lanka to install additional production capacities and to focus on dairy development initiatives. This is part of a master plan drawn up for the investment of 10 billion rupees in Sri Lanka over the next few years, Chairman, Nestlé Lanka Plc Antonio Helio Waszyk told his shareholders in his message at the release of the company’s Annual Report for the year ended December 31, 2010 last week.
“I have no doubt that this strategic investment plan will help us retain our competitive positioning and provide a firm foundation for bigger success in the future,” he said.
He said that this was in keeping with Sri Lanka’s vision of developing domestic dairy production in the coming years and the company aims to double its local fresh milk collection during this time.
“During the year, the Company continued its contribution to the rural economy by expanding its dairy development initiatives to the North and East and by procuring significant amounts of local raw material for its wide range of food and beverages products. With dairy development expansions in the North and East, Nestlé Lanka now collects milk from over 15,000 farmers everyday and has contributed Rs.1.49bn to the livelihoods of dairy farmers by way of milk purchases,” he mentioned.
Nestlé Lanka Plc recorded a profit after tax of Rs.1.9bn for the year ended December 31, 2010 as against a profit of Rs.1.58bn posted a year ago. The company’s net revenue increased from Rs.19.4bn posted in the year 2009 to Rs.21.4bn.
Meanwhile, Nestlé Lanka Plc Managing Director Alois Hofbauer in his message said the company had overachieved in its milk collection target for the year with a 20% growth and today collect over 100,000 litres of milk from 15,000 farmers everyday.
“2011 holds big plans for the company, where we will commence with our long-term LKR 10 billion investment plan this year. These investments highlight the founding philosophy of how we go about our business; where we believe that companies are only sustainable and successful over the long-term if they create value not just for their shareholders but also for the societies in which they operate,” he noted.

http://www.thebottomline.lk/2011/05/08/page4.html

More investments from Nestle for Sri Lanka's dairy development

Nestle Lanka, a unit of Swiss-based Nestle has established a malted drink plant at a cost of Rs. 560 million at its manufacturing complex in Kurunegala.

Last year, Nestle Lanka invested 1.1 billion rupees in dairy development and expansion of the Kurunegala factory complex.

A senior Nestlé group official Pierre Schaufelberger said “Nestlé sees a lot of opportunity in Sri Lanka and believes in its potential,", in a statement and the company will double its investment to 2.0 billion this year, which will be part of a 10 billion rupee planned investment in the next few years.

He said that about one third of the money will go into dairy development and dairy based products.

He further said that Dairying is a tariff protected industry in Sri Lanka, and there are also price controls on the sale of milk powder. (niz)

http://www.news.lk/home/17867-more-investments-from-nestle-for-sri-lankas-dairy-development

this is a good company who gives regular attractive dividends
-a bright future is ahead and seems no need to worry for stakeholders about the going concern and growth...

One of the share which is out of the purchasing power capacity of the most retailers

Gaja wrote:One of the share which is out of the purchasing power capacity of the most retailers

Is it really? Look at how retailers went after CFIN.

wis wrote:

Gaja wrote:One of the share which is out of the purchasing power capacity of the most retailers

Is it really? Look at how retailers went after CFIN.

I prefer Nest because it owned by Foreigners, so they will declared frequent high dividends in order to take there money out, at the moment i don't have any CFIN or NEST

Nestle (NESN.VX), the world’s largest food company, offered to buy 60 percent of Chinese candies and pastries group Hsu Fu Chi International (HSFU.SI) for about $1.7 billion to expand in one of the world’s biggest consumer markets.

The Hsu family, which owns 56.48 percent of the Singapore-listed company, will sell a 16.48 percent stake to Nestle, but the family will retain 40 percent in the firm under a joint venture deal, Hsu Fu Chi said in a statement.

The deal comes at a time when a series of accounting scandals at foreign-listed Chinese companies has triggered a widespread sell-off in China-based stocks and is prompting owners to consider mergers or partnerships.

“The investment is good for Nestle as Hsu Fu Chi has a very good distribution network in China and a decent brand profile, with 6 percent of the market share in China’s candy market,” said Tan Han Meng, an analyst at DMG & Partners.

http://print.dailymirror.lk/business/107-international/49742.html

This won't have any effect what so ever to the Lankan company as it's a separate entity.

It seems nest is overvalued. But still no sign of declining the share price day by day its price is increasing even little by little. Would like to know forum member's views on nestle. It is a great share with good management and good future growth, more than 90 % dividend from earnings as well. But is current price justifiable ?

no way justifiable
but what you said is true

On a P/E based valuation, yes NEST is over valued.
But on a intrinsic valuation NEST is not over valued.
Eg: graham formula gives about 1900/=.
#55 (8 + 2 * 14) = 1980
I personally believe that NEST will stable around 1900 by the end of this year.

It is true that in terms of DY(2.9%), there are better counters.
But the dividend growth rate of last 5 years is over 20%.
Therefore current yield should double in every 3.5 years.
#ln(2)*100/20 = 3.47
Also following record is unmatched by any counter.


PS. my views may be bit biased here. I'm long on NEST
I do reinvest all my dividends on NEST irrespective of the current price.
I entered at 900 level and currently my gain is over 1M. My DY is 3.6%

This is a great share to start DRiP investing.
1800 is not too high to enter,
but you have to go slowly, building up a safety buffer during the process.

@dileepa-nyc to see u again,whats ur opinion abt cse now,will it go higher ? whats ur trading shares?

ur opinion is very worth to me,i knw u hv long exprnce and knwldge in cse.

Dileepa wrote:On a P/E based valuation, yes NEST is over valued.
But on a intrinsic valuation NEST is not over valued.
Eg: graham formula gives about 1900/=.
#55 (8 + 2 * 14) = 1980
I personally believe that NEST will stable around 1900 by the end of this year.

It is true that in terms of DY(2.9%), there are better counters.
But the dividend growth rate of last 5 years is over 20%.
Therefore current yield should double in every 3.5 years.
#ln(2)*100/20 = 3.47
Also following record is unmatched by any counter.


PS. my views may be bit biased here. I'm long on NEST
I do reinvest all my dividends on NEST irrespective of the current price.
I entered at 900 level and currently my gain is over 1M. My DY is 3.6%

This is a great share to start DRiP investing.
1800 is not too high to enter,
but you have to go slowly, building up a safety buffer during the process.

Yes, you can apply this formula for companies with good consistent future growth. Also Nest is a company like that. But i think the assessed growth rate is too much. It's always better to apply a growth rate 60 % of last decade growth rate ( 10 years may be good), So it gives a valuation of Rs 1400. But with high dividend it gives some extra value as well so Rs1500 may be the suited value. But your valuation is correct. Thanx for giving a great answer and probably the best justification with facts and figures. Thx mate

Will NEST reach 15000 one day/
Hello everyone,please express your expert views on this.thanks

dudi wrote:Hello everyone,please express your expert views on this.thanks

In about 10 years - I guess so

Ya.it looks pretty much so.no wonder if it happens.a great company

Tell me what the exchange rate will be at that time

rain,ex rate of which currency?

Yes.

When they ban Anchor and other milk imports forever.

I was referring to LKR - USD cross rate

A Holland based firm was the global leader. Then Chernobyl occurred and it was all over red rover!

Fonterra was the combination of two large cooperatives to tackle Nestle. A cooperative where individual farmers were brought in as shareholders to encourage production and profit participation

In 2012 in order to raise capital, units were sold and the units were treated like shares with equal dividends. Australian fund manager Perpetual owns 10% of the outstanding units.

However Chinese investors preferred to buy NZ farms directly instead of the units (i.e. it's a cooperative)

Fonterra is large.... very large. It is like Ingham (one of the chicken providers to KFC, McDonalds etc).

Lets see how successful the new milk policy ......

May happen sooner than we think  

sashimaal wrote:May happen sooner than we think   

Because it is the only listed milk powder producer ?

History Form 2008, (roughly )
appreciated 100% in 13 months
another 100% next 17 months,
another 100%  in next 12 months
total  3.5 years

with the new developments,

100% 2000 -> 4000 in 18 months max
100% 4000 -> 8000 in 18 months
100% 8000 -> 16,000 in 18 months

Total 4.5 years

It can happen in 3.5 to 4.5 years : Between January 2017- and January 2018 !

NOTE: THIS IS JUST MATHEMATICS . Do not take seriously for anything. (for buying or challenging me ) Extrapolation is very dangerous in stock valuation.