BACHELOR IN BUSINESS ADMINSTRATION

SEMESTER 12 / YEAR 2019

BBAP 4103

MATRICULATION NO : 920510055012001

IDENTITY CARD NO. : 920510055012

TELEPHONE NO. : 016-6983026

E-MAIL : sivabalanmaithily@yahoo.com

LEARNING CENTRE : Negeri Sembilan

E-tutor Name : Baldev Singh A/l Pertab Singh

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Company Name and Establishment Year

Ajinomoto (Malaysia) Berhad ("the Company"), fused fifty seven years prior in 1961 began its business
activities as a merchant of monosodium glutamate ("MSG") imported from its parent organization in
Japan under the brand, AJI-NO-MOTO®. In 1965, the Company initiated generation of MSG and
therefore different items at its present industrial facility. The Company is one of the early Japanese
organizations to set up in Malaysia. The Company has since set up itself as a dynamic nourishment
flavoring producer that is trusted by Malaysian for a considerable length of time. Our AJI-NO-MOTO®
Umami flavoring has turned into a basic thing in pretty much every family unit.

Major Business

Retail Products

The Company started activities in 1961 with just a solitary item, in particular, AJI-NO-MOTO® Umami
flavoring. Today, the retail item range has extended to incorporate pepper, chicken stock and sugar. The
Company will keep on leading business sector look into on the requirements of the network in the
territory of sustenance flavoring so as to further extend its item go.

Modern Products

The Company has a wide scope of exquisite flavoring items, which the Company showcases under the
name TENCHO. These TENCHO items are generally utilized by mechanical makers of nourishment, for
example, moment noodle, flavoring, nibble sustenance, sauce, prepared nourishment, and so forth

Company Size

The Company has 10 Branches in Malaysia and 1 Sales office in Saudi Arabia to distribute its product to
its customers. AMB has a total of 632 employees up to March 2018. Male employees constitute 66% of
AMB’s total workforce as the Company is manufacturing-based. AMB has a total number of 122 foreign

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workers for FY 31 March 2018. Majority of them are Nepalese and Indonesian, which constitute 39% and
30% respectively of the foreign workforce. 22% are Bangladeshi, 8% are Filipino and the remaining 1%
is Sri Lankan. The foreign workers hired are all under the non-executive category.

Financial Highlights

In financial year finished 31 March 2018, the Company accomplished higher income by 3.9% from
RM419.9 million in the former money related year to RM436.3 million. Increment in the Company's
income was contributed by higher deals volume and selling cost of AJI-NO-MOTO® items. In any case,
the exhibition of the Company was contrarily affected by increment in the creation costs because of for
the most part higher price tag of a key crude material emerging from solid US Dollar against Ringgit
Malaysia particularly in the first 50% of the money related year. Profit before tax improved by 1.1% to
RM67.1 million in the current money related year contrasted with RM66.4 million barring the addition on
the Government's necessary procurement of part of the Company's property adding up to RM145.1
million in the past money related year. The Company declared on 12 February 2018 that the Company
went into a Sales and Purchase Agreement with Lembaga Tabung Haji and THP Enstek Development
Sdn. Bhd. for the obtaining of a bit of freehold land estimating roughly 2,030,116.58 square feet situated
in Techpark@ Enstek, for an absolute buy thought of RM81,204,663 (barring 6% Good and Services
Tax). The land securing is in accordance with the Company's long haul plans of developing its activities
and growing its fabricating offices to stay aware of the developing requests for its items.

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Shareholdings Distribution

A first and final single-tier dividend in respect of the financial year ended 31 March 2018 of 46.50 sen per
ordinary share on 60,798,534 ordinary shares, amounting to a dividend payable of RM28,271,318 will be
proposed for shareholders’ approval. The financial statements for the current financial year do not reflect
this proposed dividend. Such dividends, if approved by the shareholders, will be accounted for in
shareholders’ equity as an appropriation of retained earnings in the financial year ending 31 March 2019.

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Establishment Of Nestle Malaysia

Nestlé is a global organization and is of the world's biggest in nourishment and refreshments industry.
Heinrich Nestlé, whom otherwise called Henri Nestlé, was the author of Nestlé Company, which
headquarter is in Vevey, Switzerland in the time of 1866. Nestlé Malaysia was built up in the time of
1912 in Malaysia as Anglo-Swiss Condensed Milk Company.

Company Size

Nestlé Malaysia head office is presently situated in Mutiara Damansara, Petaling Jaya, Selangor, and has
6 deals workplaces with in excess of 5000 representatives across the country.The Company's segments
include Food and beverages, and Others, which include Nutrition and Nestle Professional. Its subsidiaries
include Nestle Products Sdn. Bhd., which is engaged in marketing and sales of ice-cream, powdered milk
and drinks, liquid milk and juices, instant coffee and other beverages, chocolate confectionery products,
instant noodles, culinary products, cereals, yogurt and related products; Nestle Manufacturing (Malaysia)
Sdn. Bhd., which is engaged in the manufacturing and sale of ice-cream, powdered milk and drinks,
liquid milk and juices, instant coffee and other beverages, instant noodles, culinary products, cereals,
yogurt and related products, and Nestle Asean (Malaysia) Sdn. Bhd., which is engaged in the
manufacturing and sale of chocolate confectionery products.

Shareholdings distribution

The calculation of earnings per ordinary share for the year ended 31 December 2018 was based on the
profit attributable to ordinary shareholders of RM658.8 million (restated 2017: RM642.6 million) and
234.5 million (2017: 234.5 million) ordinary shares outstanding during the year.

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Financial Highlights

Delivered higher revenue of RM5.5 billion, a 4.9% increase compared to the previous year. This was
supported by strong export and domestic businesses, which grew 5.0% and 4.9% respectively. Due to
improved internal efficiencies and favourable prices for key commodities, Nestlé (Malaysia) Berhad and
its group of companies (the Group) recorded a Profit before Tax of RM876 million and Profit after Tax of
RM659 million, an increase of 7.8% and 2.5% respectively for the financial year ended 31 December
2018.

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Monthly Return Of Ajinomoto Holdings Berhad

Monthly Return =(Price Of Stock Of Current Month /Price Of Stock Of Previous Month)-1

Date Price Monthly Return

Dec-18 19.4 (19.52/19.4)-1 = 0.00
Nov-18 19.52 (19.52/18.4)-1 = 0.06
Oct-18 18.4 (18.4/21.78)-1 = -0.16
Sep-18 21.78 (21.78/21.32)-1 = 0.02
Aug-18 21.32 (21.32/22)-1 =-0.03
Jul-18 22 (22/22.1)-1 =-0.00
Jun-18 22.1 (22.1/22.4)-1 = -0.02
May-18 22.4 (22.4/22)-1 =0.01
Apr-18 22 (22/22.3)-1 =-0.01
Mar-18 22.3 (22.3/22.78)-1= -0.02
Feb-18 22.78 (22.78/20.54)-1=0.11
Jan-18 20.54 (20.54/21.1)-1 = -0.03
Dec-17 21.1 0.0000

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Average Return

=Total Of Monthly Return/Number Of Periods

Date Price Monthly Return

Dec-18 (19.52/19.4)-1 =
19.4 0.00
Nov-18 19.52 (19.52/18.4)-1 = 0.06
Oct-18 (18.4/21.78)-1 =
18.4 -0.16
Sep-18 (21.78/21.32)-1 =
21.78 0.02
Aug-18 21.32 (21.32/22)-1 =-0.03
Jul-18 22 (22/22.1)-1 =-0.00
Jun-18 22.1 (22.1/22.4)-1 = -0.02
May-18 22.4 (22.4/22)-1 =0.01
Apr-18 22 (22/22.3)-1 =-0.01
Mar-18 22.3 (22.3/22.78)-1= -0.02
Feb-18 22.78 (22.78/20.54)-1=0.11
Jan-18 (20.54/21.1)-1 =
20.54 -0.03
Dec-17 TOTAL MONTHLY
21.1 RETURN: -0.07
AVERAGE=-0.07/12
AVERAGE
STOCK=
-0.006

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Standard Deviation

√Monthly Return-Average Return/(Number Of Periods-1)

Differences(Monthly Return-Average
Return) Variance
(-0.0061-(-0.0051)=-0.00 (-0.0010)² =0.000
(0.0609-(-0.0051)=0.06 (0.0660)² =0.00
(-0.1552-(-0.0051)=-0.15 (-0.1501)²=0.02
(0.0216-(-0.0051)=0.03 (0.0267)²=0.00
(-0.0309-(-0.0051)=-0.023 (-0.0258)²=0.00
(-0.0045-(-0.0051)=-0.00 (-0.0006)²=0.00
(-0.0134-(-0.0051)=-0.00 (-0.0083)²=0.00
(0.0182-(-0.0051)=0.02 (0.0233)²=0.00
(-0.0135-(-0.0051)=-0.00 (-0.0084)²=0.00
(-0.0211-(-0.0051)=-0.01 (-0.0160)²=0.00
(0.1091-(-0.0051)=0.11 (0.1142)²=0.01
(-0.0265-(-0.0051)=-0.02 (-0.0214)²=0.00
Variance 0.03000
Variance 0.03/(12-1)
Variance 0.003
Square Root Variance √0.003
Standard Deviation 0.055

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Nestle Malaysia Berhad

Monthly Return =(Price Of Stock Of Current Month /Price Of Stock Of Previous Month)-1

Date Price Monthly Return

Dec-18 147.4 (147.4/149.4)-1=-0.013
Nov-18 149.4 (149.4/143.8)-1=0.039
Oct-18 143.8 (143.8/146.4)-1=-0.018
Sep-18 146.4 (146.4/147)-1=-0.004
Aug-18 147 (147/147.6)-1=-0.004
Jul-18 147.6 (147.6/147.5)-1=0.001
Jun-18 147.5 (147.5/148)-1=-0.003
May-18 148 (148/138)-1=0.072
Apr-18 138 (138/154.5)-1=-0.107
Mar-18 154.5 (154.5/128.1)-1=0.206
Feb-18 128.1 (128.1/113.3)-1=0.131
Jan-18 113.3 (113.3/103.2)-1=0.098
Dec-17 103.2

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Average Return

Average Return

=Total Of Monthly Return/Number Of Periods

Date Price Monthly Return

Dec-18 147.4 (147.4/149.4)-1=-0.013
Nov-18 149.4 (149.4/143.8)-1=0.039
Oct-18 143.8 (143.8/146.4)-1=-0.018
Sep-18 146.4 (146.4/147)-1=-0.004
Aug-18 147 (147/147.6)-1=-0.004
Jul-18 147.6 (147.6/147.5)-1=0.001
Jun-18 147.5 (147.5/148)-1=-0.003
May-18 148 (148/138)-1=0.072
Apr-18 138 (138/154.5)-1=-0.107
Mar-18 154.5 (154.5/128.1)-1=0.206
Feb-18 128.1 (128.1/113.3)-1=0.131
Jan-18 113.3 (113.3/103.2)-1=0.098
TOTAL MONTHLY
RETURN: 0.397/12
AVERAGE:0.033

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Standard Deviation

√Monthly Return-Average Return/(Number Of Periods-1)

Monthly Average
Return(Ri) Return(Rave) Differences(Ri-Rave) Variance(²)
-0.013 0.033 (-0.013-0.033)=-0.046 (-0.046)(-0.046)=0.002
0.039 0.033 (0.039-0.033)=0.006 (0.006)(0.006)=0.000
-0.018 0.033 (-0.018-0.033)=-0.051 (-0.051)(-0.051)=0.003
-0.004 0.033 (-0.004-0.033)=-0.037 (-0.037)(-0.037)=0.001
-0.004 0.033 (-0.004-0.033)=-0.037 (-0.037)(-0.037)=0.001
0.001 0.033 (0.001-0.033)=0.032 (0.032)(0.032)=0.001
-0.003 0.033 (-0.003-0.033)=-0.036 (0.036)(0.036)=0.001
0.072 0.033 (0.072-0.033)=0.039 (0.039)(0.039)=0.002
-0.107 0.033 (-0.107-0.033)=-0.104 (0.104)(0.104)=0.020
0.206 0.033 (0.206-0.033)=0.173 (0.173)(0.173)=0.030
0.131 0.033 (0.131-0.033)=0.098 (0.098)(0.098)=0.010
0.098 0.033 (0.098-0.033)=0.065 (0.065)(0.065)=0.004
TOTAL (:0.075/(12-1)
SQUARE ROOT= √0.007
STANDARD DEVIATION=0.084

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Analysis Of Companies Stock Risk And Return

Standard deviation is an essential scientific idea that estimates unpredictability in the market, or the
normal sum by which individual information focuses contrast from the mean (Karminskiy, 2005).
Basically, standard deviation decides the spread of benefit costs from their normal price. When costs
swing up or down, the standard deviation is high significance there is high unpredictability. Then again,
when there is a restricted spread between exchanging ranges, the standard deviation is low, which means
instability is low. What would we be able to decide by this? Unstable costs mean standard deviation is
high, and it is low when costs are generally quiet and not expose to wild swings. While standard deviation
is a significant proportion of venture chance, it isn't the one and only one.. The more capricious the value
activity and the more extensive the range, the more prominent the risk (Kilyachkov, 2015). When
utilizing standard deviation to gauge chance in the securities exchange, the basic supposition that will be
that most of value movement pursues the example of an ordinary appropriation. So what would we be
able to decide from this? The littler the standard deviation, the less unsafe a speculation will be. Then
again , the bigger the fluctuation and standard deviation, the more unpredictable a security. According to
estimation of both Ajinomoto(M'sia)Berhad and Nestle(M'sia)Berhad,we can presume that Ajinomoto's
standard deviation is less hazardous and less unpredictable contrasted with Nestle as standard deviation of
Ajinomoto is 0.005 not as much as Nestle which of with 0.084 standard deviation. It is basic to
comprehend the dangers associated with stock contributing. High stock performance is in all probability
connected with higher risk taking conduct. Fund hypothesis connections dangers to restores any stock that
has high expected returns is well on the way to have a more elevated amount of hazard involved. Hence,in
this case Ajinomoto's average return is - 0.006 while Nestle's average return is 0.033.This backings the
point that high normal return is much risk than the less average return. Thus, Ajinomoto stock return is
risker than Nestle's one.

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Recommendation Whether To Buy Or Sell Companies Stocks

Profitability

Ajinomoto has accomplished reliable development in both income and benefits for as long as 10 years.
Deals expanded at CAGR of 6.68% from RM 243.8 million of every 2009 to RM 436.3 million out of
2018. With improving edges, it expanded its investors' income by CAGR of 12.77% from RM 19.07
million out of 2009 to RM 56.26 million out of 2018. Settle Malaysia has accomplished CAGR of 4.6%
and 7.2% in gathering income and investors' profit in the course of the most recent 10 years. Income has
developed from RM 3.74 billion out of 2009 to RM 5.52 billion of every 2018. This had contributed
higher investors' profit, up from RM 351.8 million out of 2009 to RM 658.9 million of every 2018..

P/E Ratio

As at 4 January 2018, Ajinomoto is exchanging at RM 18.60 an offer. Subsequently, its present P/E
proportion is 19.31 dependent on its latest year EPS of 96.3 sen determined in Point 5. It is over its 10-
Year Average of 13.54. P/E Ratio .Presently, Nestle Malaysia is exchanging at RM 145.50 per share. In
2018, it made RM 2.81 in profit per share (EPS). Consequently, its P/E Ratio is 51.78, near its most
astounding in 10 years.

Dividend Yields

In 2018, Ajinomoto has paid out RM 0.465 in profits per share (DPS). Therefore, its profit yield is 2.50%,
underneath its 10-Year Average of 3.65%.First, I found that Nestle Malaysia has a long haul reputation

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for expanding profit installments reliably in the course of recent years. It has expanded its profits per
share (DPS), up from RM 1.50 in 2009 to RM 2.80 in 2018. At the present stock cost of RM 145.50 an
offer, its profit yield is 1.92% every year. It is the most minimal in 10 yearsEvidently, The compressing
level of dividend yields caused by share price increases is reducing the stock’s attractiveness as a safe
haven. Local investors should opt for other stable and low-risk investments in Malaysia, such as fixed
deposits, bonds or even other undervalued dividend stocks. All in, we believe the relatively high PER and
compressed dividend yield of Nestle Malaysia suggest that investors are overpaying for safety. As such, I
suggest to sell companies stock of Nestle Malaysia. Whereas, for Ajinomoto although dividend yield is
quite similar to Nestle(Malaysia)dividned yield which is lower than 10-year average but earning per share
(EPS) of Ajinmoto is lower than on Nestle Malaysia which eventually makes to decide to buy
Ajinomoto’s shares in future but still if the Earning Per Share is less than 15% ,might be chances more
companies stock can be buy.

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Conclusion

Risks to the fluctuation of potential returns related with a given speculation (Limitovskiy, 2008). Risk,
alongside the arrival, is a noteworthy thought in capital planning choices. The firm should look at the
normal come back from a given speculation with the risk related with it. More elevated amounts of return
are required to make up for expanded degrees of risk at the end of the day, the higher the risk embraced,
the more adequate the arrival – and alternately, the lower the risk, the more humble the arrival. This risk
and return tradeoff is otherwise called the risk return range (Zhukov, 2014).. There are different classes of
potential speculations, each with their own situations on the general risk return range. The presence of
risk makes the need bring about various costs. For instance, the more dangerous the venture the additional
time and exertion is generally required to acquire data about it and screen its encouraging. Besides, the
significance of lost X measure of significant worth can be more prominent than the significance of an
addition of X measure of significant worth, so a less secure speculation will draw in a higher risk
premium regardless of whether the figure return is equivalent to upon a less risk venture. Risk is in this
manner something that must be made up for, and the more risk the more pay is required. At the point
when a firm settles on a capital planning choice, they will wish, as an absolute minimum, to recuperate
enough to pay the expanded expense of speculation because of swelling. Hence, expansion is a significant
contribution to an association's expense of capital. In any case, since loan costs are set by the market, it
happens much of the time that they are inadequate to make up for expansion. To accomplish their
objectives before putting resources into stocks and bonds, financial specialists must comprehend what
precisely they are putting into and realize their resistance level for risk. A few financial specialists are in
the market for a quick, high-risk return while others are increasingly alright with a long haul unfaltering
venture approach. The main wrong speculation alternative is the one that makes the financial specialist
feel outside their customary range of familiarity. Past execution of ventures is a reasonable sign of
potential future outcomes, be that as it may; past execution isn't an assurance of future outcomes. Along
these lines, every financial specialist must break down and assess for themselves the potential dangers and
prizes of ventures.

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References

Karminskiy A.M., 2005, Ratings in economics: methodology and practice (pp. 73-81). Moscow, Finances
and Statistics

Kilyachkov A.A., Chaldaeva L.A. (2015) Stock Market (pp. 57-81,142-170,280-307). Moscow, Urait.

Limitovskiy M.A., 2008, Modern technologies of supporting investment and financial decisions: theory
digest and cases (pp. 68-87). Moscow, Higher School of Finances and Management Academy of National
Economy under the Government of the Russian Federation

Zhukov E.F., Martynenko N.N, Markova M.N etc., 2014, Stock Market (pp. 120-135, 201- 233,245-280).
Moscow, Urait

https://www.nestle.com.my/aboutus/investors/annual_report

https://www.ajinomoto.com.my/ajinomoto-malaysia-berhad/annual-reports

https://www.investing.com/

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