Wilmar

Wilmar: JP Morgan upgrades to O/w from U/w, TP $4.20 from 3.30, note of improving fundamentals and a potentially strong 4Q12 to fuel a re-rating. Besides the likelihood of another QoQ earnings recovery for 4Q12, see fundamentals also improving for Wilmar as overcapacity fears may be contained. Another qoq earnings improvement likely, forecast core Net profit of US$405m for 4Q12 (excluding biological gains/losses etc). Palm & laurics margin to remain resilient, refining capacity absorption may be faster than expected. China soybean crush margin may have found low base and house raise earnings estimates for FY12E/FY13E by 26%/20% largely driven by higher palm refining and oilseeds margin assumptions.