Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED
Research House: UOB KayHian
UOB KayHian, which has a Buy rating and $7.10 target, notes property investments have acted as a negative share price catalyst, with the stock down 10% since the first announcement. But says the “market is overly concerned” over the diversification into non-commodity business. Says property is a better investment alternative for Wilmar’s strong cashflow vs financial instruments.
Company Name: WILMAR INTERNATIONAL LIMITED
Research House: UOB KayHian
Wilmar (F34.SG) +1.8% at $5.66 in mild volume of 5.5 million shares after the company announced its JV has been successful in its bids for six sites in China’s Yingkou City for total cash consideration of US$204.4 million ($264 million).
UOB KayHian, which has a Buy rating and $7.10 target, notes property investments have acted as a negative share price catalyst, with the stock down 10% since the first announcement. But says the “market is overly concerned” over the diversification into non-commodity business. Says property is a better investment alternative for Wilmar’s strong cashflow vs financial instruments.
It adds, both JV partners are established players with strong track record in high-end property development and hotel operations, while the company’s focus on commodities is unlikely to change.
“Short term, Wilmar’s share price might need a very strong catalyst for re-rating but do not be overly negative as its margin turnaround can happen very fast.” Orderbook suggests $5.70 as cap near term.
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