Monday, December 16, 2013

Wilmar International : Underappreciated assets (CIMB)

Wilmar International
Current S$3.58
Target S$4.12
Underappreciated assets

We like Wilmar as we believe that investors have overlooked the potential of the group's strong integrated agribusiness model, due to concerns over weak crushing margins in China and rising refining capacities in Indonesia.

The stock's attractive P/BV of 1.2x, vs. the historical average of 1.9x, suggests that investors have priced in all these concerns but not the potential of its investments in sugar, flour, rice and downstream facilities. Under our new rating structure, our call changes from Outperform to Add. We maintain our SOP-based target price, with recovering earnings as the key rerating catalyst.


Resilient earnings model
The group reported a 24% jump in 9M13 core net profit, even though it continues to face challenging operating environments for some of its key divisions and weaker CPO selling prices. We believe this demonstrated that the group's business model is more resilient than its peers. Also, Wilmar successfully notched up a 6% improvement in its 9M13 palm and laurics PBT margin and was relatively unaffected by the sharp decline in the industry's refining margins due to additional new refining capacities in Indonesia. This achievement is testimony that the group's large integrated palm oil facilities and its venture into value-added downstream facilities have enabled it to withstand headwinds cause by higher refining capacities.

Key profit drivers for 2014
We expect Wilmar's net profit to grow by 11% in 2014, driven mainly by higher oilseeds and grains, plantations and sugar contributions. We project better margins for the oilseeds and grains division as we believe the poor 2012 margins have led some industry players to scale down their expansion plans or operations. Plantation earnings will benefit from higher CPO price, while the sugar division will gain from higher merchandising activities.

Beneficiary of Indonesia's higher biodiesel mandate
As Indonesia’s largest biodiesel producer, Wilmar stands to gain from the government's move to raise the biodiesel mandate to 10%, through higher domestic biodiesel demand. This will help to offset weaker biodiesel exports to the EU, following EU decision to impose anti-dumping duties on biodiesel producers in Indonesia.




Source/Extract/Excerpts/来源/转贴/摘录: CIMB-Research,
Publish date: 02/12/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock