Company Name: WILMAR INTERNATIONAL LIMITED
| Research House: UOB KayHian | Price Call: BUY | Target Price: 3.80 |
UOB KayHian raises Wilmar (F34.SG) to Buy from Hold.
“We foresee 2013 pre-tax margin to be more stable and have better visibility. As Asia’s largest agri-commodity company, Wilmar can have better bargaining power in a high-inventory market and enjoy lower raw material prices.”
It expects Wilmar to benefit from the release of oilseeds and vegetable-oil reserves in China, starting in early March; “as the largest oilseed crusher and consumer pack cooking oil producer, Wilmar will bid for these, which are usually released from national reserves at a below-market price.”
It raises its target to $3.80 from $3.70 after applying a higher 2013 P/E of 15x vs the previous 13x for the oilseed & grain division on the oilseed-reserves release and strong sales volume growth from non-cooking oil consumer packs. The stock is up 0.9% at $3.39.
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