MARKET PULSE: Wilmar, Singapore Residential Property (18 Sep 2012)

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 3.06

MARKET PULSE: Wilmar, Singapore Residential Property

18 Sep 2012

KEY IDEA Wilmar: Share buyback boost but outlook still muted Wilmar International Limited (WIL) bought back some 7.4m shares at S$3 each on 13 Sep (mandate to buy up to 10% of issued shares). Also buoyed by recent QE3 initiatives, the share price rebounded some 10% over the past two sessions. However, we are still not convinced that there is a structural improvement in WIL's near-term fundamentals. Nevertheless, we note that the market is adopting a more risk-on approach on the back of QE3. Hence we raise our valuation peg from 12.5x to 13.5x, which sees our fair value edging up from S$2.90 to S$3.06 (still based on blended FY12/13F EPS). But as the fundamental outlook is still rather muted, we maintain HOLD; and investors may consider taking profit around S$3.40 or higher. (Carey Wong) MORE REPORTS Singapore Residential Property: Traditionally quiet period URA data yesterday showed a headline total of 1,539 new private residential sales (including 118 EC units) in Aug 12, down 26% MoM over a traditionally lull period of the Hungry Ghosts' Month of the lunar calendar. Excluding EC and landed-units, sales volume similarly fell 26% MoM to 1,383 units while units launched dipped 38% MoM to 1,047 units. Overall take-up rate, however, remained healthy at 132% (up from 110% previous month). Of note, RCR sales came up 103% MoM to 367 units sold (versus 181 units in Jul 12), partially attributable to a successful launch at One Dusun Residences (153 units out of 154 total units sold at S$1,532 psf). Maintain OVERWEIGHT on residential developers. Top stock picks are City Developments [FV: S$13.10, BUY], CapitaMalls Asia [FV: S$1.85, BUY] and Roxy-Pacific [FV: S$0.54, BUY]. (Eli Lee)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks ended lower Monday for the first session in five following a winning streak that brought the indexes to multi-year highs. The Dow fell 0.3% to 13,553.10. The S&P 500 Index slid 0.3% to 1,461.19. - Cambridge Industrial Trust has entered into separate agreements for the proposed acquisitions of two properties totaling S$56.3m. - CWT Limited has entered into a share sale and purchase agreement to acquire the entire 100% stake in global physical merchant LN Metals International Limited for a total consideration of US$12.31m. - Grand Banks Yachts has agreed to place out 19.223m new shares worth S$5.238m (27.25 S cents each) to two parties, including a trust linked to Genting Group's Lim Kok Thay. The post-placement enlarged capital base consists of 115.33m shares. - Courage Marine Group has entered into an agreement to purchase 10% of the shareholdings of Santarli Realty Pte Ltd and the shareholder's loans. The consideration for the purchase of the shares will be S$100k.