Wilmar 05 (Feb 22 - Dec 27)

[winston]

vested

Key takeaways from 1Q results briefing

Wilmar could post better qoq earnings in 2Q due to stronger YKA earnings.

We do not expect the palm oil export ban to impact its earnings significantly.

The value of stakes it owns in YKA and AWL worth more than its market cap

TP: RM 5.69

Wilmar said possible options to unlock shareholders value include selling additional shares in listed subsidiaries, buying back shares, distributing some of its shares in listed subsidiaries to Wilmar shareholders, or taking Wilmar private.

Of these options, we think the more imminent scenarios are share buybacks (Wilmar bought back 3.6m shares today) and sale of another 6.5% stake in AWL.

Wilmar is undervalued as the current market value of its 90% stake in Yihai Kerry Arawana and 44% stake in AWL of US$38.3bn is 89% higher than its market cap of US$20.1bn.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 6935D9686D

[winston]

vested

WILMAR INTERNATIONAL (WIL SP)

Recommendation : BUY
Fair Value : SGD 5.61

EXPECTING A BETTER 2Q22.

1Q22 net profit boosted by one-off gains
Expecting better crushing margins in 2Q22
Navigating through short-term challenges

Wilmar’s 1Q22 revenue rose 23.2% year-on-year (YoY) to USD17.6b while net profit was up 17.8% YoY to USD530.3m, driven by strong contributions from the Plantation and Sugar Milling segment, and an exceptional gain of USD175.6m on dilution of interest in Adani Wilmar Limited (AWL).

Management mentioned that Wilmar’s contributions from Russian and Ukraine joint ventures (JVs) are not material.

As commodity prices were pushed higher due to Russia-Ukraine tension, this could benefit Wilmar’s Plantation and Sugar Milling segment. However, high commodity prices are also expected to weigh on Food Products segment’s margin due to higher raw material costs.

Pertaining to the ban on palm oil export by the Indonesian government from 28 April 2022, management expects the ban to be temporary given ample supply of production vs domestic demand.

As such, the impact of the export ban on Wilmar’s tropical oils operations in Indonesia is likely to be limited.

We revise our estimates and lower our fair value estimate from SGD5.95 to SGD5.61.

Source: OCBC

[winston]

vested

UOB KH maintains ‘buy’ on Wilmar, highlights ESG practices

by Lim Hui Jie

They maintain their net profit forecasts for Wilmar at US$1.78 billion ($2.49 billion), US$1.82 billion and US$2 billion for 2022, 2023 and 2024 respectively.

Some catalysts that they see for the company are a stronger recovery in China operations and a surprise margin upside from the good timing in sourcing of raw materials.

Source: The Edge

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

[winston]

vested

Wilmar International (WIL SP)
2Q22 Preview: Uneventful Quarter; Look Forward To Better 2H22

Wilmar is scheduled to release its 1H22 financial results on 4 Aug 22 after market close.

For 2Q22, we are expecting core net profit of US$300m-330m or 1H22 core net profit of US$628m-658m (1H21: US$732m).

1H22 earnings will be mainly supported by palm and sugar operations, while operations in China should be able to turn around in 2H22.

The recent agri commodity price correction will translate into better margins for the food product segment in 4Q22. Maintain BUY. Target price: S$5.50.

Source: UOBKH

https://research.uobkayhian.com/content ... c5f367f99b

[winston]

vested

Wilmar International (WIL SP)
1H22: Results Above Our Expectations

Wilmar’s 1H22 core net profit of US$980m came in above our expectations.

The positive variance mainly came from strong operating margins.

We expect 2H22 earnings to remain resilient, supported by greater sales volume and higher margin for its consumer products as well as higher contribution from sugar millings.

We expect the palm upstream operation contribution to be lower as commodity prices have softened recently but still better yoy.

Maintain BUY. Target price: S$5.50.

Source: UOBKH

https://research.uobkayhian.com/content ... 71637abc25

[winston]

vested

Wilmar International
Record high profit and dividend in 1H22

Wilmar’s 1HFY22 CNP above, on higher plantation and sugar milling earnings.

Plantation segment posted record 1HFY22 earnings, as higher CPO price
more than offset impact from Indonesia export ban.

Wilmar could beat our and consensus’ forecasts and post another record
earnings year in FY22F. Reiterate Add with unchanged TP of S$5.69/share

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 3FF7AB6BDE

[winston]

Wilmar reports record earnings of US$1.16 bil for 1HFY2022

by Felicia Tan

Wilmar International has reported record earnings of US$1.16 billion ($1.61 billion) for the 1HFY2022 ended June, 55.8% higher than earnings of US$750.9 million in the same period the year before.

Revenue for the 1HFY2022 grew by 22% y-o-y to US$36.13 billion.

Plantation and sugar milling saw pre-tax profit more than double to US$435.8 million in the 1HFY2022 from US$164.0 million on the back of higher palm prices and better performance by the sugar milling operations in India.

As at June 30, Wilmar’s net tangible asset (NTA) per share fell by 0.3% y-o-y to US$3.16.

According to the group, the higher commodity prices led net debt to increase, resulting in a higher gearing ratio of 0.99x as at June 30, from 0.87x as at Dec 31, 2021.

Cash and cash equivalents stood at US$3.42 billion.

Source: The Edge

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

[winston]

vested

A longer wait; D/G to HOLD
Weaker growth & prices may pressure vols & margins

Wilmar’s 1H22 PAT (excluding one-offs) beat Street and was in-line with MIBG.

Growth was primarily driven by higher upstream palm oil prices, where downside risks
to ASPs are increasing.

Concurrently, downstream demand and margin recovery may take longer in a backdrop of recession and prolonged Chinese lockdowns.

We lower TP to SGD4.47 from SGD6.56 and downgrade to HOLD.

We see limited near-term catalysts for re-rating.

Prefer BAL for stronger growth, valuations and yield.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/273095.pdf

[winston]

vested

WILMAR INTERNATIONAL (WIL SP)

Recommendation : BUY
Fair Value : SGD 5.23

A STRONG QUARTER.

Record 1H22 net profit of USD1.2b
Improvement across key segments
An interim dividend of 6 Singapore cents per share was declared

Wilmar’s 1H22 revenue rose 22.3% year-on-year (YoY) to USD36.1b, driven by higher commodity prices and stronger performances across its key segments.

Core PATMI (excluding non-operating items) and PATMI rose 57.8% and 55.1% YoY to USD1.2b in 1H22, above ours and street’s forecasts.

Despite the headwinds from a high volatile commodity market, palm oil related government policies in Indonesia, and lockdowns in China, 2Q22 PATMI came in strong at USD634.6m (+19.7% quarter-on-quarter, QoQ, or ~doubled YoY), underscoring Wilmar’s operational synergies from its diversified and integrated business model.

Looking into 2H22, management expects the recent corrections in commodity prices to help restore some of the demand destroyed by high prices and further improve the downstream margins.

Moreover, management sees limited impact of lockdowns in China on its operations given its well distributed nationwide plants in China.

Source: OCBC

[winston]

Wilmar International (WIL SP)
Good Performance Despite Volatile Agri-Market

Wilmar’s 1H22 core net profit was a huge positive surprise, and was also a record-high
profit for 1H.

We raise our 2022 earnings forecast by 12% to a net core profit of US$1.8b
(-3% yoy) to factor in stronger-than-expected 1H22 PBT margins across all three
segments.

Despite this upward revision, we deem our earnings estimate for 2022
relatively conservative because 2H is usually the stronger half of the year.

Maintain BUY. Target price: S$5.50.

Source: UOBKH

https://research.uobkayhian.com/content ... 64396a1f59