SG: MARKET PULSE: Wilmar (6 Sep 2013)

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 3.33

MARKET PULSE: Wilmar

6 Sep 2013

KEY IDEA Wilmar: Upgrade to BUY - decent entry level Wilmar International Limited's (WIL) share price has taken a bit of a hit after it reported slightly below par 1H13 results on 7 Aug (core earnings met about 40% of our previous full-year forecast), falling 4.5% to a recent low of S$3.0x. But as mentioned in our 12 Aug report, we would be buyers at S$3.10 or better, as we believe that most of the risks would have been captured in the price. Keeping our fair value at S$3.33 (still based on 12.5x blended FY13/FY14F EPS), we note that there is now a decent 10% upside from here. Hence we are upgrading our call from Hold to BUY. Note that an appreciating USD against SGD would also have a modest boost to our fair value. (Carey Wong)

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

NEWS HEADLINES - US stocks climbed for a third consecutive session on Thu, with the Dow posting its longest winning run since mid of Jul, as investors looked to the government's monthly job report. - Moody's Investors Service has downgraded the subordinated debt ratings of 3 Singapore banks in a region wide exercise to reflect the increasing global trend of bail-in risks. - The consortium comprising Nobel Design, Lian Huat Group and 2E Capital, which bought the freehold Hotel Windsor in the MacPherson area last year, is converting the hotel's office-retail podium into a strata retail development for sale. - SingTel's wholly owned unit, Amobee, has conditionally agreed to pay US$15m for Gradient X, a firm with net tangible liabilities of about US$1.1m as at end-May. - Asia-Pacific Strategic Investments is trying again to turn its business around after announcing plans for a reverse takeover deal to become a mining play. - Hiap Hoe Limited expanded its overseas portfolio with a A$105m (S$122.2m) acquisition of a mixed use retail and office asset in the Central Business District of Melbourne, Australia. - Rex International has announced their 2QFY13 result, with a reported net loss of US$685k, as compared to net loss of US$287k in 2QFY12.