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MY Morning Wrap | Q2 Net Profit for Nestlé Malaysia Falls 48% to RM93.6m Amid Lower Domestic Sales

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Moomoo News MY wrote a column · 2 hours ago
Good morning mooers! Here are things you need to know about today's market:
●Nvidia, Alphabet, Microsoft, Drag S&P, Nasdaq Lower
●Selangor Attracts RM12.4 Billion Investments in 2024 Q1
●Inflation May Rise with Diesel Subsidies, But Still Manageable: Analysts
●Malaysia's Nominal GDP Grew 1.6% to RM1.8 Trillion in 2023
●Stocks to watch: Nestle, TT Vision, United Plantations
-moomoo News MY
MY Morning Wrap | Q2 Net Profit for Nestlé Malaysia Falls 48% to RM93.6m Amid Lower Domestic Sales
Wall Street Summary
$Alphabet-A(GOOGL.US)$, $Microsoft(MSFT.US)$, and $NVIDIA(NVDA.US)$ led the decline in the Magnificent Seven stocks, dragging down the S&P 500 and the Nasdaq to fall amid increasing speculation that big money is shifting from this year's biggest gainers to unloved equities.
The $S&P 500 Index(.SPX.US)$ fell 0.5% to close at 5,399.22 on Thursday, while the tech-heavy $Nasdaq Composite Index(.IXIC.US)$ dropped 0.9% to 17,181.72. In contrast, the $Dow Jones Industrial Average(.DJI.US)$ gained 0.2% to 39,935.07, highlighting the divergence between previously high-flying mega-caps and the rest of the stock market.
Breaking News
Selangor Attracts RM12.4 Billion Investments in 2024 Q1
Selangor has seen a significant increase in investments during the first quarter, with a 66.8% surge from RM7.44 billion to RM12.4 billion in comparison to the same period last year. These investments are expected to create approximately 29,000 new jobs for Malaysians. Selangor's Mentri Besar, Datuk Seri Amirudin Shari, has stated that the state government will continue to collaborate with partners such as the Investment, Trade and Industry Ministry and the Malaysian Investment Development Authority (Mida) to achieve their objectives, including becoming a RM500 billion economy within the next two to three years. According to Mida's report, as of 2023, Selangor contributed to 25.9% of the national gross domestic product and 17.67% of the national exports.
Inflation May Rise with Diesel Subsidies, But Still Manageable: Analysts
According to analysts, Malaysia's inflation is predicted to increase in the latter half of 2024 (24H2) as a result of adjustments made to diesel subsidies, with the possibility of further risks based on the expected reduction of RON95 subsidies. In the most recent Monetary Policy Statement (MPS) by Bank Negara Malaysia (BNM), an upward trend in inflation for 24H2 was highlighted, largely driven by the recent rationalisation of diesel subsidies. This is a departure from the earlier statement made in May, which had predicted a moderate inflation rate for 2024, supported by stable demand conditions and controlled cost pressures. Public Investment Bank Bhd (PublicInvest) has indicated that despite the projected rise, inflation is expected to remain manageable due to mitigation measures aimed at reducing the impact of costs on businesses.
Malaysia's Nominal GDP Grew 1.6% to RM1.8 Trillion in 2023
The Department of Statistics Malaysia (DOSM) has reported that Malaysia's nominal gross domestic product (GDP) for 2023 reached RM1.8 trillion. However, the growth rate moderated to 1.6%, a significant drop from the double-digit 15.9% recorded in 2022. Despite this, Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin stated that the economy remained resilient, largely due to the increase in private final consumption expenditure, which rose by 6.7%. He also attributed the growth to the implementation of a new minimum wage of RM1,500, which went into effect in May 2023 and helped boost employment and wage enhancements.
Stocks to Watch
$NESTLE(4707.MY)$: Nestlé (Malaysia) Bhd's net profit declined 48.27% to RM93.60 million in the second quarter ending June 30, 2024, down from RM180.92 million a year ago, due to lower domestic sales reflecting subdued consumer sentiment and constrained purchasing power. Revenue for the quarter stood at RM1.52 billion, down 13% compared to RM1.75 billion a year earlier. The group declared an interim dividend of 70 sen per share.
$TTVHB(0272.MY)$: Phillip Capital Research anticipates that TT Vision Holdings Bhd will report an increase in earnings for its second quarter ending June 30, 2024, driven by an increase in order deliveries and a strong order backlog. The company, which develops and manufactures machine vision equipment, is expected to report higher sequential earnings in 2Q24, with plant utilization rising to 80% compared to 70% in 1Q24. The company's RM67 million order book provides earnings visibility until 1Q25 and is considered significant for the company.
$UTDPLT(2089.MY)$: Apex Securities has stated that United Plantations Bhd's earnings are expected to accelerate in the second half of this year as the planter enters its peak production phase. The research house has maintained a "hold" recommendation on the group with a target price of RM27.21. Additionally, the research house added that the implementation of the B40 biodiesel mandate in Indonesia in 2025 could serve as a potential catalyst in driving CPO price upwards due to supply squeeze from higher palm oil consumption.
$VITROX(0097.MY)$: ViTrox reported a 25.4% year-on-year fall in net profit to RM28.1 million in the second quarter ending June 30, 2024, down from RM37.66 million, due to ongoing research and development investment and unfavourable foreign exchange losses. Revenue for the quarter fell 8.2% to RM137.2 million, from RM149.39 million in 2QFY2023, on lower sales of automated board inspection, but was partially offset by robust sales orders from its machine vision system.
$LUXCHEM(5143.MY)$: Luxchem reported a 30% rise in net profit to RM12.2 million for the second quarter ending June 30, 2024 (2QFY2024), compared with RM9.42 million in the same quarter a year ago, thanks to higher contributions from both trading and manufacturing activities. Revenue rose 33% year-on-year to RM210.2 million from RM157.6 million. The company declared a 0.8 sen dividend.
$TEXCHEM(8702.MY)$: Texchem Resources returned to the black in the second quarter ending June 30, 2024, after six consecutive quarters of losses, thanks to higher sales across all business divisions, except for its food division, which was dragged down by higher forex losses in its Myanmar operations. Net profit for the quarter was RM975,000 compared to a net loss of RM6.26 million over the same period a year ago, and revenue for the quarter rose 22.58% to RM294.74 million from RM240.45 million.
$SCIB(9237.MY)$: Sarawak Consolidated Industries has accepted a contract worth RM162 million for an engineering, procurement, construction and commissioning (EPCC) project over a 23-month period in Mualim, Perak. The contract was given to its wholly-owned subsidiary, SCIB Properties Sdn Bhd, by Awana JV Suria Saga Sdn Bhd, to allow the latter “an opportunity to repay the outstanding owing to SCIBP”.
$JAKS(4723.MY)$: JAKS Resources's subsidiary, JAKS Solar Power Holdings Sdn Bhd, has signed a memorandum of understanding with $TDM(2054.MY)$'s 70%-owned subsidiary, TDM-YT Plantation Sdn Bhd, to collaborate on a land lease for its bid in the fifth Large Scale Solar (LSS5) programme. The MOU outlines plans for JAKS Solar Power and TDM-YT Plantation to conduct feasibility studies on land use for the LSS5 project and negotiate lease agreement terms.
$AZRB(7078.MY)$: Ahmad Zaki Resources announced that its wholly-owned subsidiary, Ahmad Zaki Sdn Bhd (AZSB), has won a contract worth RM151.99 million to design and construct the Port Dickson Specialist Hospital in Negeri Sembilan. The contract, awarded by the Public Works Department, will commence on August 6 and last for 156 weeks.
$IGBREIT(5227.MY)$: IGB Real Estate Investment Trust reported a 6.5% increase in net property income (NPI) to RM109.48 million in the second quarter ending June 30, 2024, compared to RM102.79 million in the previous year, due to an increase in rental income. Revenue rose 5.95% to RM149.97 million from RM141.54 million, and distributable income rose to RM94.69 million. The REIT declared a distribution of 2.56 sen per unit.
$IGBCR(5299.MY)$: IGB Commercial Real Estate Investment Trust reported a 10.8% rise in NPI to RM34.45 million in the same period, due to higher rental income. The REIT declared a distribution of 0.97 sen per unit.
$KIPREIT(5280.MY)$: KIP Real Estate Investment Trust reported a 62.8% increase in NPI to RM26.43 million for the fourth quarter ending June 30, 2024, compared to RM16.23 million in the previous year, thanks to strong gains in retail properties in Peninsular Malaysia's northern and central regions. Revenue rose 46% year-on-year to RM32.64 million from RM22.39 million, and income distributable to unitholders was 28% higher at RM13.49 million.
$UOAREIT(5110.MY)$: UOA REIT's net rental income fell 22.06% to RM16.48 million in the second quarter ending June 30, 2024, from RM21.15 million a year ago, due to higher property operating expenses. Gross rental dropped 3.07% to RM27.59 million from RM28.47 million, due to the departure of an anchor tenant. Net profit declined 42.08% to RM8.1 million from RM13.98 million a year ago. The REIT declared a distribution of 2.9 sen per unit.
Source: Dow Jones Newswires, Bursa Malaysia, The Malaysian Reserve, The Star, The EDGE
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