Wilmar 04 (Feb 15 - Dec 25)

[winston]

Wilmar International (WIL SP)
2020: Strong Performance From All Segments

Wilmar’s 2020 core net profit came in within our expectation.

The strong performance can be mainly attributed to robust sales volumes and better margins for all segments.

Wilmar has proposed a final and special dividend of S$0.155/share.

Earnings outlooknshould remain positive with:
a) sales volumes remaining healthy thanks to the Chinese economy’s rebound;
b) strong recovery in China’s swine industry; and
c) better palm and sugar prices.

Maintain BUY. Target price: S$6.40.

Source: UOBKH

https://research.uobkayhian.com/content ... 6522533437

[winston]

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Quick View

Target Price*S$ 6.67
Recomendation**BUY
Market Cap*S$ 33729m

Key Statistics
Dec US$ m 2019 2020f 2021f
Revenue 42,641 42,219 44,270
Net Profit 1,235 1,361 1,386
Profit Gth (%) (5.3) 10.2 1.9
PE (X) 14.6 13.9 13.7
Div Yield (%) 3.1 3.2 3.3
P/BV (X) 1.1 1.1 1.0
Source: DBS Group Research (At the time of publication)

Our Views
Wilmar set to reap the benefits after a decade of investments to deliver steady profit performance. Wilmar’s strong earnings growth momentum from both its China and ex- China operations should support Wilmar’s share price performance and close the valuation gap with its China subsidiary YKA. Beside its well-integrated platform, we think Wilmar should trade at higher multiples on better market liquidity than YKA.

Strong food demand to underpin margin uptrend. Wilmar's profitability has been expanding in the last three years and is expected to remain firm from its growing exposure to higher-margin branded grocery food segment. Wilmar is expected to continue to post sublime 2021 earnings performance, mainly driven by YKA in China.

Riding on China's growing food industry. Based on current trends, the COVID-19 situation in China seems to be under control as well as a recovering economy, we expect domestic consumption of oilseeds and other food products to continue benefitting Wilmar.

Risks
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.

Valuation
We used sum-of-the-parts (SOTP) valuation methodology to arrive at a target price (TP) of S$6.67, which implies 21x FY21F PE. Wilmar should trade at a higher PE multiple on emerging foot print in consumer branded products segment, which helps Wilmar to achieve better margins.

Source: DBS

https://www.dbs.com.sg/treasures/aics/s ... WIL_SP.xml

[winston]

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Wilmar International (WIL SP)
All Engines Are Ready To Charge Again In 2021

We remain positive on Wilmar after the analysts’ briefing.

We maintain our earnings growth expectation of ~11% yoy at US$1.66b.

The performance is again likely to be driven by a higher sales volume with steady margins.

As most of the end products are consumer staples demand remains steady and should be able to mitigate the margin pressure from rising feedstock prices.

Final & special dividend will go ex on 23 Apr 21.

Maintain BUY. Target price: S$6.40.

Source: UOBKH

https://research.uobkayhian.com/content ... 0fdd7b558d

[winston]

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Special dividends make up for weaker 4Q

Wilmar’s final results were 5% below our forecast due to higher taxes.

Positive on strong final and special dividend of S$0.155 (div yield 2.8%).

The value of its stake in YKA is worth 3.1x Wilmar’s current market cap.

Reiterate Add, with a higher SOP-based TP of S$6.15.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 665bcdafb9

[winston]

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Searching for the next catalyst

Outlook for most of key earnings indicators looks positive heading into 1Q21.

Potential catalysts are plans to unlock value, value-accretive M&As, stronger
earnings and narrowing of WIL’s valuation gap with YKA.

Reiterate Add for more liquid exposure to YKA with SOP-TP of S$6.15.

source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 665bcdafb9

[winston]

Wilmar International (WIL SP) - A strong year

Wilmar’s FY20 revenue rose 18.5% YoY to USD50.5b while core PATMI was up 18.3% YoY to USD1.5b, boosted by strong performance across its key segments.

A final dividend of 9.0 S cents per share and a special dividend of 6.5 S cents were declared, bringing the total dividend for FY20 to 19.5 S cents per share (+56% YoY).

This is the highest dividend declared since listing.

Wilmar’s share price rose ~27% since our last report in Nov 2020 on the successful listing of YKA and the recovery in CPO prices and demand.

We remain positive on Wilmar given that
1) the listing of YKA provides long-term benefits to Wilmar as it allows Wilmar to penetrate further into China;
2) recovery in CPO and sugar prices;
3) higher crushing margins as China restocks after ASF;
4) continued recovery from HORECA demand; and
5) beneficiary of renewed confidence on Indonesia’s B30 program after Indonesia raised export levy.

After adjustments, our fair value increases from SGD5.40 to SGD6.16. BUY.

Source: OCBC

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Analysts peg Wilmar's fair value at over $6 on strong FY20 performance

by Felicia Tan

“Given the three-year moratorium, Wilmar will not be able to sell down its YKA holdings in the near term”.

However, the group could fund potential mergers and acquisitions (M&As) within and outside China, complementary to its existing YKA businesses, via the issuance of new YKA shares.

The group is trading at forward price-to-earnings (P/E) of 17 times against YKA’s estimated P/E of 66 times.

Source: The Edge

https://www.theedgesingapore.com/capita ... paign=FREE

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Wilmar International led the buyback consideration tally over the five sessions, buying back 463,000 shares at an average price of S$5.38 per share.

As of Feb 24, Wilmar International had purchased 0.71 per cent of its issued shares (excluding treasury shares) on the current mandate.

With its FY20 results reported on Feb 22, Wilmar said that to demonstrate its belief in its business model and the prospects of its business, in FY20, it bought back about S$190 million of its shares.

Source: Phillips

[winston]

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Wilmar International Ltd
Recommended Action: Technical SELL

Wilmar International (SGX: F34) upside has hit our first target price as per our report on 3rd February 2021.

However, prices lack the momentum to bring prices higher and as such, the wave 5 has potentially completed as of now based on recent technical and price action.

Source: Phillips

http://internetfileserver.phillip.com.s ... Wilmar.pdf

[winston]

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CGS-CIMB positive on Adani Wilmar listing plan as it allows Wilmar to unlock value

by Tan Siew Mung

CGS-CIMB Research is positive on Wilmar International Ltd’s 50%-owned associate Adani Wilmar Ltd's (AWL) planned listing, as this will allow Wilmar to unlock value for shareholders should it decide to sell down some of its existing stake in AWL and reward investors with special dividends.

Wilmar is also PPB Group Bhd’s 18.5%-owned associate.

“Our current sum of parts (SOP)-based target price (TP) conservatively values Wilmar’s AWL stake at 1 times price to book value or US$176 million only. There is potential upside of US$2.7 billion (S$0.56/share) to our SOP at the higher end of our sensitivity analysis on market valuation,” she said.

She reiterated "add" on Wilmar at S$5.27 with an unchanged SOP-based TP of S$6.15.

Source: theedgemarkets.com

https://www.theedgemarkets.com/article/ ... lock-value