Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED
Research House: DBS Vickers
Says Chinese government’s recent consent to rise in cooking oil prices should allow Wilmar to adjust to recent jump in soybean prices, but may not necessarily boost profitability given its efforts to maintain market share; “Wilmar should still remain the price leader in China’s cooking oil market; but we also believe that Wilmar’s relative pricing against domestically produced soybean oil would narrow in consequence to the higher imported price, and a slower pace in CNY revaluation.”
Company Name: WILMAR INTERNATIONAL LIMITED
Research House: DBS Vickers
DBS Vickers downgrades Wilmar (F34.SG) to Hold from Buy, lowers target to $6.90 from $7.50; cuts FY10-12 earnings forecast by 1%-5% after revising down oilseeds pretax margin/MT estimate to US$33 ($42.6) from US$39-US$41; palm & lauric margin view to US$26 from US$29; consumer pretax margin forecast to US$46-US$48 from US$51-US$52/MT.
Says Chinese government’s recent consent to rise in cooking oil prices should allow Wilmar to adjust to recent jump in soybean prices, but may not necessarily boost profitability given its efforts to maintain market share; “Wilmar should still remain the price leader in China’s cooking oil market; but we also believe that Wilmar’s relative pricing against domestically produced soybean oil would narrow in consequence to the higher imported price, and a slower pace in CNY revaluation.”
Adds, Sucrogen buy may provide catalyst, expects final approval sometime in December.
Shares +1.6% at $6.50 but underperforming peers.
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