Thursday, January 17, 2013

Wilmar

Wilmar: CLSA maintains Sell with $3.39 TP. House note that given the likelihood of trading profits in Wilmar’s oilseeds segment for 4Q12, upgrade earnings by 4-7% leading to TP moving to S$3.39. However, with China’s crushing industry still in over-capacity, house do not see significant margin recovery in the near term. Furthermore, Wilmar is trading at a significant premium to sector, and above book value despite generating a ROE below its Cost of Equity. As such, while see nearterm strength in share price as we ride into a good 4Q12 result, house would SELL Wilmar post results, with fair value at $3.39.

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