Wilmar 02 (Jan 10 - Feb 11)

[winston]

Not vested. Cant see any catalyst ..

Singapore Hot Stocks-Wilmar up on Goldman report

SINGAPORE, Jan 8 (Reuters) - The benchmark Straits Times Index <.FTSTI> was 0.22 percent higher as of 0750 GMT on Friday.

The following stocks were on the move:

** WILMAR UP ON GOLDMAN REPORT Shares of Wilmar International rose as much as 3.7 percent after Goldman Sachs added the world's largest listed palm oil firm to its Conviction Buy List.

Goldman analysts raised the target price of the stock to S$8.90 based on its dominant position in agribusiness refining and edible oils, and its proxy to Chinese consumer growth.

( Nothing has changed though.. )

With palm oil prices coming up, stocks of companies in the industry are generally doing very well, a local trader added.

Wilmar's Singapore-listed peer Golden Agri-Resources was the most active stock on the exchange, with more than 120 million shares traded. It was up as high as 4.3 percent.

Around 0747 GMT, Wilmar was up 3.4 percent at S$6.99 with over 10 million shares changing hand.

Source: Reuters

[winston]

Not vested. CPO Prices higher means less margins, if they are not able to pass on the cost. The Chinese govt did freeze prices a few years ago. No EPS Growth @ PE 17.


From Kim Eng:-

Wilmar – Company Update (Rohan Suppiah, DID: 64321455)
Previous Day Closing price: $7.04
Recommendation: BUY (maintained)
Target price: $8.10 (raised from $7.50)

Thriving on volatility
We are raising Wilmar’s net profit forecast for FY10 by 5% to US$1,871m, on the back of stronger CPO prices. Wilmar does not directly benefit from higher CPO prices, as it is a net buyer of CPO to supply its massive downstream operations; however, as the largest market buyer of CPO, Wilmar has always done well when CPO prices are volatile, through its dominant presence and insight in the edible oils market.

CPO prices trending up
Our revised FY10 numbers factor in higher turnover but reduced margins. CPO prices have risen by over 40% over the last 3 months on anticipation of stronger demand as economies emerge from the economic crisis, notably China. The demand-driven recovery will also allow Wilmar to sustain or raise its average selling prices across all segments.

Commodities recovery a catalyst
We believe that there is potential for more upside as the broader commodities cycle is on an upturn. CPO prices have also risen in tandem with crude oil, which sets a baseline for CPO prices as a biofuel source. This could prove to be a strong catalyst for Wilmar’s stock price outperformance.

( Not Logical. If CPO is going up, margins will be affected if they cant raise prices. Can they raise prices ? Will the Chinese government allow them to raise prices ? )

China listing can be revived
Wilmar is also likely to revive its plans to list its China businesses in Hong Kong in the coming months, as market conditions have improved. A high multiple for its China businesses is justifiable due to its ability to leverage and replicate its current edible oils distribution network into several other consumer staples such as rice and flour.

( When it was their turn to list in HK, the market conditions were very good. Nothing has changed and this cant be a catalyst ).

Currently, comparables such as China-Agri and China Foods are trading at between 20x to 24x FY10 earnings. We peg its potential listing multiple at 21x, without yet factoring the new businesses to our earnings forecasts.

SOTP valuation at S$8.10 - maintain BUY
Our new FY10 net profit forecast implies a 9% rise over FY09, excluding 3Q09’s one-time gain of US$167m for the sale of new shares of Wilmar China to members of the Kuok Group. This is also a healthy 10% 3-year CAGR to 2011.

We are shifting our valuation multiple to FY10 earnings, and ascribe a blended PER multiple of 21x for Wilmar China and 19x for its non-China business. This yields a new target price of S$8.10, up from S$7.50 previously. Maintain Buy.

[winston]

Not vested. From UOBKH:-

Valuation/Recommendation

Maintain BUY with target price of S$8.84. We like Wilmar for its strong volume growth driven by both downstream capacity expansion and consumer pack business in China.

Our target price of S$8.84 is based on sum-of-theparts valuation, valuing its non-China operations at 18x 2010F PE and its China operations at 20x.

[iam802]

2010Jan-Wilmar-800x600.png

[LenaHuat]

Hi iam802
What do you see from the chart? A firm breakout from the $6/40 level? Me, no TA.

[iam802]

I think we are going to see retracement for Wilmar soon (if price goes below $7).

Whether it goes below $6.40 will depends on how fast the retracement comes and how much it falls within a short timeframe.

If it falls sharply, the support at $6.40 may not hold.

If the retracement is slow and just takes it time to fall... we might see support at 6.79 and 6.40

Note:
- 6.79 is a critical level.
- that could be the level for a Bearish Cross confirmation

[kennynah]

notice the doji ("t" shape) candle formed at the top print around 11Jan2010... this forebodes a very bearish inclination...i suspect price will dip below $7 quite certainly...

[Aspellian]

2010Jan-Wilmar-800x600.png

802, can i ask some TA stuff on your Wilmar:

On your chart nexus, i saw you use certain TA indicators:

Conversion(9d), Base (26d), Cloud (Leading 26d, 52d)... can you please enlighten me of these ie. how it works and in laymen terms what you looking at?

I dun see this on ChartNexus indicators (or is yours the premium version?)

thanks!

[iam802]

Aspellian,

That is part of the Ichimoku indicators. You can get it in the Free version.

1. Look under Ichimoku Kinko Hyo

2. ChartNexus has a mising indicator for Ichimoku which is the Chikou Span. If you refer to my chart, that will be the green line.

3. To get the Chikou Span, in ChartNexus, look for 'Displaced Moving Average' and configure it to the following:
- Period = 1
- Displacement = -26 (<< Note the negative sign in front)

Hope this helps

[Aspellian]

Thanks 802! will go read up on the Ichi and Chikou!