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
3.34
Same
3.34
