Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED
Phillip Securities Research in an Oct 5 research report says: "We expect better 3Q11 results on the back of higher CPO to soybean oil discount, greater availability of CPO supply and lower CPO prices. We also believe that the group's drive into higher value added products would improve margins over time.
"We expect production to increase over the next 3 years as more of Wilmar's palm plantation enters prime age. Lifting of price caps in China should improve margins and sales volume in 3Q11. We arrive at a target price of $4.47 based on our sum-of-the-parts methodology.
"We value Wilmar's plantation and palm oil mills business based on 2.5x book value and its palm & laurics, oilseeds & grains, consumer products and sugar businesses based on 10x/5.5x/20x/11x FY12e earnings respectively. We value its share of associates and other businesses at 10x FY12e earnings. DOWNGRADE TO HOLD."
Company Name: WILMAR INTERNATIONAL LIMITED
| Research House: Phillip Securities | Price Call: HOLD | Target Price: 4.47 |
Phillip Securities Research in an Oct 5 research report says: "We expect better 3Q11 results on the back of higher CPO to soybean oil discount, greater availability of CPO supply and lower CPO prices. We also believe that the group's drive into higher value added products would improve margins over time.
"We expect production to increase over the next 3 years as more of Wilmar's palm plantation enters prime age. Lifting of price caps in China should improve margins and sales volume in 3Q11. We arrive at a target price of $4.47 based on our sum-of-the-parts methodology.
"We value Wilmar's plantation and palm oil mills business based on 2.5x book value and its palm & laurics, oilseeds & grains, consumer products and sugar businesses based on 10x/5.5x/20x/11x FY12e earnings respectively. We value its share of associates and other businesses at 10x FY12e earnings. DOWNGRADE TO HOLD."
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