Wilmar 04 (Feb 15 - Dec 21)

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Wilmar International (WIL SP) - Record 3Q results

Wilmar’s 3Q20 results came in above ours and market expectations.

3Q20 revenue rose 19.3% YoY to US$13.3b while PATMI grew 20.0% YoY to US$536.6m.

Wilmar announced that a special dividend of approximately 15% of the total IPO proceeds i.e. US$0.31b will be declared in 2021.

Management guided that the final dividend for FY20 will be no less than 16.0 S cents per share, including the special dividend of 6.5 S cents, backed by Wilmar’s strong performance and sees a ‘fair chance’ for a record earnings this year.

We believe that the valuation gap between Wilmar and YKA is too large and Wilmar’s business is undervalued.

We are expecting a strong 4Q given the continued recovery in CPO and sugar prices, improved crushed activities, and economic recovery as lockdown measures eased in most of the regions where the Group operates.

We believe that the listing of YKA could provide long-term benefits to Wilmar as it allows Wilmar to penetrate further and grow at a faster pace in China and the valuation gap is likely to be lifted over time with sustained YKA’s valuations.

Our fair value estimate remains at S$5.40. BUY.

Source: OCBC

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Wilmar buys back 20 million shares, chairman increases stake.

Source: Phillips

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RE-ITERATE Wilmar International (WIL SP) Entry – 4.89 Target – 5.36 Stop Loss – 4.68

Share price is about to break the previous high that was set in early August 2020.

Crude palm oil price broke the 8-year high of RM3,628/tonne, now trading at RM3,670/tonne.

Yihai Kerry, that subsidiary that was spun-off last year and listed in China, is now trading at record highs with a market cap of RMB657bn (equivalent to S$134bn).

Wilmar owns 89.99% of Yihai Kerry. Wilmar’s market cap is S$29.5bn.

Technically, RSI shows a positive upward momentum.

Source: KGI

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RHB raises Wilmar's TP to $6 as the group rides on CPO price uptrend

by Felicia Tan

“If Yihai Kerry Arawana’s post-listing share price performance and special dividends are not enough to lift Wilmar's share price, then strong commodities prices and rising margins are here to give it another booster shot in 2021”.

Wilmar’s upstream oil palm business would stand to gain on rising margins, since its cost of production is stable at about US$400 ($527.13) per tonne.

“Although its Indonesian plantations would have a lower realised CPO price as a result of the export levy, it is still enough for bountiful profits.”

Wilmar is also in a position to take advantage of Indonesia’s export levy structure.

The Indonesian government has set the reference price for CPO at US$951.86 per tonne for January.

At this price, CPO exports from the country will incur tariffs of US$224 per tonne.
Together with an export tax of US$74 per tonne, this means that upstream plantation players would receive a discount of as much as US$299 per tonne for CPO sales in January, boding well for Wilmar, being the largest palm oil processor in Indonesia.

Source: The Edge

https://www.theedgesingapore.com/capita ... ce-uptrend

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Wilmar International (WIL SP)
All Engines Firing To Deliver Good Earnings

We raise our 4Q20 core net profit forecast to US$350m-380m on
better-than-expected contribution from YKA.

Recent share price performance was driven by better earnings outlook and the
strong rally in YKA’s share price, which has appreciated 370% from its IPO price
of Rmb25.70 since listing on 15 Oct 20.

Maintain BUY and raise target price to S$6.40.

Source: UOBKH

https://research.uobkayhian.com/content ... 147e0729da

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Wilmar International (WIL SP)

Share Price: SGD5.08
Target Price: SGD6.80
Recommendation: Buy

Strengthening momentum

We see four areas where WIL can potentially surprise in 4Q20:
1. Record soybean crush margins
2. Rising palm oil prices
3. Normalising activities in China and
4. Margin accretive Indonesian export taxes.

Yet it is trading at a 75% discount to YKA.

We believe, over the longer term, this may trigger further actions to unlock value such as asset carve outs or even privatisation.

While WIL has re-rated 21% in the past 1-month, we believe significant upside exists as they execute. Raise TP to SGD6.80. BUY.

Source: Kim Eng

https://factsetpdf.maybank-ke.com/PDF/2 ... b8ba27.pdf

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What’s New

Wilmar to benefit from the success of its well established brand, and after a decade of investments in its distribution channels and production facilities

Hence, we believe that Wilmar deserves higher a valuation multiple than its CPO plantation peers

Raise FY21-22F earnings by 7% on stronger topline growth and profitability

Lift TP to S$6.67, maintain BUY

Key Risks to Our View:

Worse-than-expected second wave of COVID-19 could lead to global recession. Worse-than-expected fatality rates caused by COVID-19 may lead to a more severe impact on
China’s economy and affect Wilmar’s operations in China.

Source: DBS

https://researchwise.dbsvresearch.com/R ... =fjiickhfj