Wilmar International - OCBC Investment 2016-03-18: Tax on soda trend could crimp sugar ambition

Wilmar International - OCBC Investment 2016-03-18: Tax on soda trend could crimp sugar ambition WILMAR INTERNATIONAL LIMITED F34.SI 

Wilmar International: Tax on soda trend could crimp sugar ambition 

  • The United Kingdom (UK) is to join a growing list of countries taxing excessive sugar levels in soft drinks; UK intends to introduce a levy on sugar sweetened drinks in two years’ time, based on the volume of sugar contained in sweetened drinks either produced or imported into the country. 
  • Based on media reports, the levy could increase the price of a 2L bottle of soda by up to 80%. 
  • Other countries that have introduced a similar levy include Finland, France, Mexico, while South Africa will introduce one next year. 
  • If the sugar levy becomes a world-wide trend in a bid to cut spiraling childhood obesity levels, it could potentially crimp the sugar ambition of major sugar producers like Wilmar International (WIL). 
  • We will be keeping a close watch on developments in this area. We currently have a HOLD on the stock with a fair value of S$3.34. 
  • Meanwhile, we note that the recent rise in WIL’s share price may have been a little too fast, too furious, based on current fundamentals. 



Carey Wong CFA OCBC Securities | http://www.ocbcresearch.com/ 2016-03-18
OCBC Securities SGX Stock Analyst Report HOLD Maintain HOLD 3.34 Same 3.34


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