Upgrade to HOLD. Nestle's ongoing heavy capex is supporting the group's earnings momentum, particularly with an upcoming plant in Shah Alam, which should provide additional capacity. It is also positive that export growth continues to maintain a steady double-digit pace. We raise our capex assumptions for FY12 to MYR180m (from MYR139m) and lift our terminal growth assumption by +0.5% to 1.0%. Our DCF-derived TP is correspondingly raised to MYR54.20 from MYR52.40, while 2013 net yields of 4+% provide support to the share price.

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Source: Maybank Research - 20 June 2012