Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED
DBS Vickers Securities in a Dec 6 research report says: "FY2011F-2013F earnings revised by -9% to +6%. We lowered the group's Palm & Lauric M&P pretax margin as we expect high inventory carried forward from end Sep11 to erode margins in a declining price environment in 4Q11.
"We have also adjusted our estimates of the group's Plantations segment to account for the impact of new Indonesian export tax which was previously underestimated, while sugar segment EBITDA was adjusted on added merchandising volume. Proserpine is now included from FY2012 onwards.
"While Wilmar is aggressively expanding its oleochemicals capacity in East Java, we believe the group's sugar plantations in Papua (not included in our forecast) could face further delays. Our revised target price of $5.40 now implies FY12F PEmultiple of 14.9x, with 3-year earnings CAGR of 19%. MAINTAIN HOLD."
Company Name: WILMAR INTERNATIONAL LIMITED
| Research House: DBS Vickers | Price Call: HOLD | Target Price: 5.40 |
DBS Vickers Securities in a Dec 6 research report says: "FY2011F-2013F earnings revised by -9% to +6%. We lowered the group's Palm & Lauric M&P pretax margin as we expect high inventory carried forward from end Sep11 to erode margins in a declining price environment in 4Q11.
"We have also adjusted our estimates of the group's Plantations segment to account for the impact of new Indonesian export tax which was previously underestimated, while sugar segment EBITDA was adjusted on added merchandising volume. Proserpine is now included from FY2012 onwards.
"While Wilmar is aggressively expanding its oleochemicals capacity in East Java, we believe the group's sugar plantations in Papua (not included in our forecast) could face further delays. Our revised target price of $5.40 now implies FY12F PEmultiple of 14.9x, with 3-year earnings CAGR of 19%. MAINTAIN HOLD."
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