Wilmar - Wilmar 4Q net profit likely down 4%: Poll

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED
Research House: UOB KayHian

Wilmar International (F34.SG) 4Q net profit likely fell 4% to US$425 million as margins on selling cooking oil and grains such as rice in China are squeezed by local price controls, according to a Dow Jones poll of six analysts.



Revenue is expected to rise 14.6% to US$7.93 billion. Analysts say oilseeds crushing margins remain under pressure, with the company forced to absorb a part of the higher commodity prices.

However, Wilmar may benefit from stronger prices of palm oil as it secured supplies while prices were still low.



“Wilmar’s share price is likely to underperform the market and peers in the first half of 2011 due to the margin concerns and unhappiness over its recent property investment in China,”



UOB KayHian says in a note, but keeps its Buy rating on the stock with a target price of $7.10. Wilmar is due to report earnings on Feb. 23.