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Wilmar International - Maybank Research 2022-03-07: Catching Up

WILMAR INTERNATIONAL LIMITED (SGX:F34) | SGinvestors.io WILMAR INTERNATIONAL LIMITED (SGX:F34)

Wilmar International - Catching Up


Trailing behind peers. This gap should close

  • Wilmar (SGX:F34)’s scale and diversification makes it amongst the most geared to benefit from the current commodity cycle. Bad weather, supply chain bottlenecks and the Russia-Ukraine conflict puts earnings upgrade risks on the upside, in our view. However, Wilmar's share price is still trading at a discount to its parts as well as lagging peers. We think these gaps should close as earnings delivery rolls in.



Valuation gap between peers, itself

  • Wilmar’s market cap discount to Yihai Kerry Arawana (YKA) and Adani Wilmar is 42% - the lowest since YKA’s IPO. However, this is still a large discount. Its operations in South-East Asia, Europe and Africa are being ascribed negative value.
  • Compared to its commodity trading peers, Wilmar's share price has underperformed by +49% in the past year. Against the palm oil sector, the underperformance is +29%.
  • Indeed, Wilmar’s parts have significantly higher intrinsic value compared to the whole of the parent. Management claims they would look at further value unlocking exercises especially from Indonesia and Africa.
  • With its peer group trading at 31x forward P/E today vs 21x just 3-months ago, we think the risks of further restructurings are on the upside going forward.


Geared towards higher commodity prices

  • Wilmar’s Plantation & Sugar edge in procuring even during supply scarcity.


Maintain BUY on Wilmar with higher target price






Thilan Wickramasinghe Maybank Research | https://www.maybank-ke.com.sg/ 2022-03-07
SGX Stock Analyst Report BUY MAINTAIN BUY 6.56 UP 5.800



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