1.

0 INTRODUCTION

Bursa Malaysia known as one of the largest bourses in ASEAN. Bursa Malaysia offers a wide
range of exchange-related facilities, which include listing, trading, clearing, settlement, and
depository services. They monitor and supervise the integrated exchange wholly. Bursa
Malaysia plays a huge and vital role in economic development of Malaysia as the primary
regulator of the Malaysian capital market and is responsible for preserving a fair and orderly
market for the securities and derivatives traded through its facilities. Their base is in Kuala
Lumpur, Malaysia and has been standing tall and strong since 1964.

The performance of companies that market the shares of their business in Bursa Malaysia is
basically measured by the ratio analysis. Ratio analysis is defined as a technique that
financial experts would utilize the financial statements from the annual report, which include
the balance sheets and income statements. The usage of the ratio analysis includes an idea of
the financial health of the company. Ratio analysis is used to regulate several aspects of the
company, it includes liquidity ratios, efficiency ratios, leverage or debt ratios, profitability
ratios, and market ratios to measure the performance of the company.

There are numerous of big companies from various sectors that market their shares via Bursa
Malaysia to earn funds to run their companies internally and externally. Therefore, we have
decided to choose two of the companies that produce and distribute dairy products that have
high demand for their products and shares in Bursa Malaysia. They are Nestle and F&N, and
we studied their fundamentals for a five-year-long report from 2018 to 2022 based on the
annual report they posted on the internet.

The purpose of this research is to provide insight into the companies’ financial health and
their prospects. Our objective in conducting this research is to evaluate the performance of
Nestle and compare the data to F&N. The goal of this research is to determine whether Nestle
or F&N is operating their business in this industry efficiently. This research will be focusing
on determining if Nestle is performing better or worse than F&N in Malaysia according to the
annual report that they published publicly in Bursa Malaysia for their shareholders to inspect.

As much as we have studied, we know that Nestle is a Swiss company that was founded by
Henri Nestle in the year 1866. According to the history of Nestle in Malaysia, they began in
1912, when their base was in Penang as the Anglo-Swiss Condensed Milk Company, and
they moved their base to Kuala Lumpur in 1939 due to the growth and expansion of their
business. As of now, Nestle operates six factories, and they employ over 5000 people in
Malaysia in total. They produce over 500 products with Halal certification. The main
objective of Nestle Malaysia is unlocking the potential of food to improve everyone's quality
of life, now and for future generations.

As for F&N, it was founded by John Fraser and David Chalmers Neave in the year of 1883.
All these years, F&N has become an iconic household brand. F&N is a company in Malaysia
that known for manufacture and distribution of dairy products and beverages, but the
company’s product profile involves isotonic, tea, packaged water, soft drinks and dairy based
drinks. The objectives of F&N include drive profits by focusing on improving capital
management, expanding and strengthening our position in new and current geographic
markets, and developing product extensions.
2.0 Background Company A (Nestle)

Nestle was founded by Henri Nestle and the Page Brothers in 1866 and now as for over 150
and they have drawn expertise during the years to enhance the quality of life for everyone.
Nestle has stated that their objective is to unlock the power of food and to enhance quality of
life for everyone, today and for generations to come which comes to their key objective,
which to centre their energy and resources to unlock the power of food that would make the
greatest difference to the lives of people and pets, protect and enhance the environment.

The company began by the foundation of the Anglo-Swiss Condensed Milk Company. Their
first product sold in the market was Farine Lactee, which is a combination of cow’s milk,
wheat flour, and sugar. This product is designed to replace breastfeed, as there are babies that
could not be breastfed by their mother. Nestle used to focus on producing dairy products and
baby food, but as time goes by, they have expanded their business into producing and selling
numerous of products. They include coffee, chocolate, bottled water, and cereals. Nestle
company runs globally as they operate in almost every country on earth and have market for
their products in over 180 countries. Nestle’s brand portfolio covers a broad range of food
and beverages include Nestea, Nescafe, Nestle Crunch, and Maggi.

Nestle known as a significant emphasis on research and development, continually innovating

its products, so that they could meet the changing needs and demands of consumers. The
Nestle research center is known located in Lausanne, Switzerland and is familiar as one of the
leading research facilities in the food industry. As for corporate social responsibility, Nestle
has faced several issues, including its marketing of baby formula in a number of developing
countries and concerns on water bottling practices. Furthermore, Nestle has been involved in
corporate social responsibility initiatives as addressing issues such as environmental
sustainability, human rights, and nutrition. Nestle has been one of the largest and most
profitable food and beverage companies globally. This led by combination of strong brand
recognition, diverse product offerings, and strategic acquisitions.
3.0 Background Company B (F&N)

F&N or also known as Fraser & Neave is a company founded by John Fraser and David
Chalmers Neave, which in 1883, they have formed The Singapore and Straits Aerated Water
Company that produces carbonated drinks. F&N today is known as a Malaysian-based
conglomerate with a variety of portfolio of businesses, which include food and beverage,
property development, and publishing. At the beginning of its foundation, F&N focus on the
production of carbonated beverages but as time goes by, they started expanding their
business. The main objective of F&N is to drive earnings, emphasizing on sharpening capital
management, widening, and deepening their presence in new and existing geographical
markets and create product extensions.

In Malaysia, it is a well-known fact that F&N is a prominent player in the beverage industry
of the country as they produce a variety of products, including soft drinks, dairy products, and
isotonic drinks. Now F&N has expanded their focus on other sectors of industry. They
include property development and publishing. F&N operation line can be seen in numerous
of countries around Southeast Asia and has most well-built presence in Malaysia and
Singapore. In Malaysia, F&N can be classified as one of the big companies that lead the food
and beverages.

The ownership of F&N has changed in 2007 as a Thai beverage and property conglomerate,
TTC Group has acquired a substantial stake in F&N. While in 2013, F&N has gone through a
major corporate restructuring, which involve the sale of its beverages business entirely. They
stated that the restructuring was to aim on the core business areas. As for corporate social
responsibility, F&N has been involved in the initiatives as they tend to focus on areas like
community development, environmental sustainability, and employee welfare. F&N is a
company that focus on its investments and driving the growth of its Power Brands. F&N
generates new innovations each year, especially in products development and processes.