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NESTLE’S nine months of financial year 2025 (9MFY25) revenue climbed 9% driven by firm domestic demand and double-digit export growth, reaffirming Nestle Malaysia’s position as the group’s largest Halal manufacturing hub.
“We believe the recovery was aided by the easing impact of consumer boycott on certain Western brands,” said Kenanga.
In tandem with stronger sales, its core net profit rose 6%. Quarter three of financial year 2025 (3QFY25) top line edged up 6% thanks to both local and export sales, likely supported by higher volumes benefiting from the RM100 one-off cash aid, which began on 31 August and contributed for only one month in 3Q.
Its key brands such as Milo, Maggi and Nescafe are among the eligible products. Despite higher earnings before interest and tax, core net profit fell 8% due to higher effective tax rate.
“We expect gradual recovery to persist into FY26, underpinned by sustainable topline momentum as boycott’s impact tapers off and domestic demand continues to normalise,” said Kenanga.
Additional support should come from the one-off RM100 SARA cash aid utilisable until end-December and another round starting in mid-Feb 2026, while tourism-related spending during Visit Malaysia 2026 (VM2026) is likely to further lift out-of-home demand.
Meanwhile, cocoa prices have eased from their recent peak and are currently 24% below 2024 average, though still 87% higher than in 2023.
In contrast, coffee bean prices remain volatile, up 22% year-to-date and well above historical averages. That said, a stronger MYR should help to partially offset imported raw material cost pressures.
“We like NESTLE for its strong brand and diversified product range, and the inelasticity in the demand for staple food products,” said Kenanga.
While recent experience has shown that it is vulnerable to downtrading by consumers amidst sustained elevated inflation, Kenanga now see room for earnings recovery driven by stabilising input costs and potential volume uplift in the near term under the RM100 SARA cash aid.
However, with margin recovery still trailing 2023 levels in the near term due to structurally higher input costs, Kenanga believes valuations remain fair at current levels as the market is likely to ascribe some premium for NESTLE’s leverage to tourism-driven consumption ahead of VM2026. Kenanga reiterates Market Perform for Nestle. —Oct 29, 2025
Main image: New Straits Times
The post Nestle rides post-boycott recovery as sales and profits strengthen: Kenanga first appeared on Focus Malaysia.
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