Wilmar

Wilmar: DBSV downgrades to Hold with $3.65 TP. House believe any upside surprise to 4Q12 numbers should no longer be the catalyst for the share price (DCF base year is FY13F). Based on sensitivity analysis using the RM2,500 CPO price (ceteris paribus), estimate there would be c.10% downside to FY13F bottom line and a $0.05 downside to TP. Having run up 18% since our upgrade on 12 Nov12, do not recommend adding positions at this point. Think any synergistic M&A deals going forward would be the key catalyst for Wilmar - rather than improvements in CPO price (unlikely to exceed our expectations) and/or crush margins in China (unlikely to return to double digits).