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Wilmar Intl
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Wilmar - Watch for a Strong Rally to Come!
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WanSiTong
Supreme |
02-Jun-2014 10:57
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Wilmar International Limited - Profit warning at China Agri-Industries suggests continued pressure in China crush margins into 2Q14 &ndash stay UW Written By Stock Fanatic on Monday, June 2, 2014 | 2.6.14
· China Agri-Industries (606 HK) &ndash The second largest oilseeds crusher in China issued a profit warning due to weak crush margins:
China Agri-Industries, the second largest oilseeds crusher in China behind Wilmar, issued a profit warning last Friday. Based on its preliminary review, the company recorded a loss for the four months ended 30 April 2014 and expects its 1H14 results to remain in a loss-making situation. According to China Agri-Industries, the losses were due to the sharp rise in international soybean prices on tight stockpiles of US oil crop and sluggish domestic demand resulting in product (soybean meal and oil) prices being lower than input prices, i.e. negative crush margins. The depreciation of the RMB against the USD also added further pressure.
· Negative crush margins likely to still pressure Wilmar into 2Q14:
The profit warning by China Agri-Industries appears to reinforce our earlier view that Wilmar&rsquo s oilseed & grain segment losses are not just a one-quarter affair, but are likely to continue experiencing negative crush margins into 2Q14.
· Palm & laurics margin may also see pressure:
Furthermore, with palm refining capacity in Indonesia expected to increase by c.50% from 30.7 million MT to 45 million MT by the end of 2014, Wilmar&rsquo s palm & laurics segment profitability, which is the largest profit contributor to the Group, may also be affected by margin erosion. While Wilmar' s margin has been relatively more resilient due to a higher sales mix of high value-add/margin refined products, gradual margin decline has been observed in the last four quarters. Its 1.1 million MT of biodiesel supply contract to Pertamina this year for the B10 program, priced at MOPS, is also expected to result in margin drag for the segment.
Technical Analysis
· Stay UW:
We maintain our UW view on Wilmar stock as we believe the worst is still not over and the share price underperformance is unlikely to reverse in the near term. (Read Report)
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MerzMerz
Senior |
27-May-2014 18:57
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But most of his prediction did come true... However with the increase of portfolio announcement today, I think share price will up up up tmr. 1700 thousand lots bought at 3.25 today!
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lglg666
Supreme |
24-May-2014 09:32
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No see mentaltrader prediction here lately ha ha maybe kana stay in IMH. | ||
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Blanchard
Master |
20-May-2014 20:59
Yells: "Winners cry..... Losers smile....." |
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Industry group says no El Nino impact on palm oil till early 2015..... http://www.thestar.com.my/Business/Business-News/2014/05/20/No-El-Nino-impact-on-palm-oil-till-2015/ |
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Blanchard
Master |
16-May-2014 20:08
Yells: "Winners cry..... Losers smile....." |
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Goodman Fielder Board Backs Takeover Bid First Pacific and Wilmar in 50:50 Joint Venture First Pacific Company Limited and Wilmar International Limited announce that they are proceeding with due diligence following a recommendation by the Board of Directors of Goodman Fielder Limited to accept a joint takeover of Goodman Fielder by a 50:50 joint venture between First Pacific and Wilmar. Late last month First Pacific and Wilmar submitted a non-binding all-cash offer for the joint acquisition of all of the shares in Goodman Fielder via a scheme of arrangement at A$0.65 per share, valuing the shares at A$1.27 billion. Earlier this week the bid was raised to A$0.70 per share, valuing Goodman Fielder at A$1.37 billion. It is this revised offer that Goodman Fielder&rsquo s Board has now unanimously recommended. " We are very pleased to be able to take a significant step forward with this proposed transaction," said Manuel V. Pangilinan, Chief Executive Officer and Managing Director of First Pacific. " In Wilmar we have a terrific partner in this investment." Kuok Khoon Hong, Chairman and CEO of Wilmar said, " We thank the Goodman Fielder Board for their support and look forward to working with First Pacific to make this a successful transaction for all." Goodman Fielder is the leading listed food company in Australasia with such iconic brands as Medow Lea, Praise, White Wings, Pampas, Mighty Soft, Helga' s, Wonder White, Vogel' s (under license) and Meadow Fresh. Wilmar is Asia&rsquo s leading agribusiness group and one of the largest companies listed in Singapore. Hong Kong-listed First Pacific is a leading investment management and holding company with most of its operations in Southeast Asia. The due diligence by First Pacific and Wilmar is anticipated to take several weeks. |
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Blanchard
Master |
16-May-2014 00:00
Yells: "Winners cry..... Losers smile....." |
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Wilmar & First Pacific raise offer for Goodman Fielder to S$1.6 billion and will not increase the price further in the absence of a competing proposal and has given the board of Goodman Fielder until 8pm on May 16, Melbourne time, to make a decision whether to support the revised bid.
THE joint Asian bid for Goodman Fielder is moving closer to resolution, with the company&rsquo s shares placed in a trading halt as the board considered a sweetened, 70c-a-share offer that two major shareholders are understood to have accepted for part of their holdings. Singapore oils trader Wilmar International and Hong Kong investment group First Pacific lifted their bid by 5c a share, valuing Goodman at almost A$1.37 billion (S$1.6 billion) &mdash enough to extract acceptances for 5 per cent holdings from Perpetual and Ellerston Capital, which respectively own 12.2 per cent and 13 per cent of the target. Wilmar already owns 10.1 per cent of Goodman, enabling the bidders to lift their combined stake to 20 per cent. The bid, however, remains conditional on the approval of the Goodman board, as well as the Foreign Investment Review Board&rsquo s backing for Wilmar and First Pacific to lift their holding above 15 per cent. Reports yesterday said it was also conditional on the sale by Perpetual and Ellerston of about half their stakes. Goodman asked for the trading halt pending an announcement about a potential change of control. Trading is scheduled to resume by Monday at the latest, with the stock last fetching 67.5c. Last month, Goodman became the latest food industry takeover target, with Wilmar and First Pacific lodging a non-binding, conditional proposal at 65c a share, capitalising the company at A$1.27bn. The move came soon after a veiled warning by Goodman chief Chris Delany at The Australian&rsquo s Global Food Forum, when he noted that &ldquo more and more and more of the ownership of the food manufacturing assets have moved into multinational hands&rsquo &rsquo . He said that while he had spent a good part of his career at multinationals &ldquo so I don&rsquo t think that&rsquo s a bad thing&rsquo &rsquo , he noted one of the outcomes was &ldquo more and more ... research and development and technical functions have moved offshore&rsquo &rsquo . The Goodman board has previously opposed the overtures, saying the suitors were being &ldquo opportunistic&rdquo and undervaluing the company. However, it signalled its willingness to negotiate by appointing Credit Suisse as its adviser, with UBS and Bank of America Merrill Lynch acting for the bidders. The April 28 proposal came only weeks after Goodman&rsquo s fourth earnings downgrade since 2011. After A$700 million in write-offs over the past three years, the company flagged further possible writedowns, sending Goodman&rsquo s shares plummeting as much as 20 per cent to a 19-month low of 47.5c. Goodman has long been seen as a likely takeover target, more so now given the strategic value of Australian food businesses as the Asian middle class continues to grow. The A$500m-plus takeover of Warrnambool Cheese & Butter by Canadian dairy giant Saputo was the most recent example. Wilmar and First Pacific have been turning up the pressure on the Goodman board by threatening to walk away if the target proceeds with its plan to sell all or part of its New Zealand dairy business. The bidders said their proposal specified there were to be no material asset sales. This followed Goodman&rsquo s announcement of a strategic review of the NZ dairy business in February, after expressions of interest. |
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Octavia
Supreme |
15-May-2014 16:44
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Target S$3.47 (Stock Rating: HOLD)
At its 1Q14 results briefing, Wilmar revealed that soybean crush margins have improved from 1Q but remain in negative territory. It is more optimistic on its refining margin prospects in 2Q due to improved palm oil supplies. The group also guided for higher palm oil production driven by better yields, but sugar milling operations may be impacted by lower sugar prices. Overall, we expect 2Q14' s earnings to improve qoq. We maintain our SOP-based target price and Hold rating. The stock remains cheap on P/BV (1.1x) but this is offset by the challenging operating conditions faced in some key divisions.
What Happened The main takeaways from Wilmar' s results briefing are: 1) The soybean crush margin in China has improved from 1Q14' s level, but remain in negative territory. The group believes this situation is unsustainable and expects margins to revert back to positive territory, possibly in 2H. 2) It expects refining margins to improve in 2Q due to higher palm oil supplies and plans to participate in Indonesia' s third biodiesel tender. 3) It revealed that Indonesia is considering expanding the palm oil products range in the export tax list to encourage further downstream investment. 4) It highlighted that the offer price for Goodman Fielder (GF) is based on the assumption that there are no material disposals by GF. 5) It explained that hedging costs to eliminate forex exposure on its Chinese deposits should be included in its funding costs. What We Think We are slightly more positive on its palm and laurics division following (1) guidance of improving refining margins in 2Q and (2) our view that the potential export tax changes in Indonesia could benefit the group. But this is offset by the current negative soybean crush margins observed by the group in China and lower sugar prices. We believe that it will take some time for the market to absorb the exceptionally high soybean supplies in China. As such, crush margins may only turn positive from 3Q onwards. We expect the group' s plantation (higher production), consumer products (higher sales volume) and sugar divisions (milling activities in 2H) to deliver better earnings in 2Q. What You Should Do The stock lacks short-term catalysts due to the challenging conditions the company faces in some of its markets. But we see limited downside from the current price level as it is trading close to its book value, and we remain positive on the long-term prospects of the group. |
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Blanchard
Master |
13-May-2014 23:19
Yells: "Winners cry..... Losers smile....." |
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Four options for Goodman Fielder 1. Shareholders accept an offer from Wilmar and First Pacific. 2. Parmalat, or another company, makes a successful superior offer. 3. Goodman sells its New Zealand diary business. 4. An Australian or New Zealand white knight partners with Goodman in a joint venture, to more aggressively export into the massive and growing South East Asia dairy market, particularly that in China. Shareholders Action Motley Fool contributor Chris Koenig advises shareholders not to accept the current 65 cent bid and to wait as long as possible till the last card has been played. Hopefully the third choice prevails, so that the dairy and associated businesses remain in local hands.
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spore1
Supreme |
12-May-2014 22:30
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wilmar is looking attractive to accumulate
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jackson5
Master |
12-May-2014 20:28
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Thye still have quite a lot to offload, must say very good so that can sell to those who want to buy from them. |
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lucky168
Veteran |
12-May-2014 19:59
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analysts are simply just in love with this company. no matter how bad the company performs, they can come out with all sorts of reasons rule #1: never fall in love with stock |
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pnuklis
Master |
12-May-2014 18:49
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Still getting hantam liao |
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shadow
Veteran |
09-May-2014 16:14
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Who says what:- good luck ! Barclays maintained its &ldquo overweight&rdquo rating on the Wilmar stock with a target price of $4.10 despite the losses, saying it expected a recovery in the second half of the year to provide future upsides for the company.
&ldquo The strong performance in the plantation business and significantly better volumes and margins in the consumer business bode well for a recovery in the second half when the profitable season kicks in for sugar, and crushing margins (hopefully) normalize,&rdquo the brokerage said in a note on Friday.
&ldquo It&rsquo s disappointing,&rdquo Ben Santoso, an analyst with DBS Vickers, said by phone. &ldquo The plantations and consumer products were ahead of expectations, but they couldn&rsquo t offset the drop in processing margins in soybean and palm.&rdquo Source: OCBC Research - 9 May 2014 Wilmar International Limited (WIL) made a dismal start to FY14, with reported net profit tumbling 49% YoY and 56% QoQ to US$161.8m, hit by negative soybean crush margin and lower demand for soybean meal also higher seasonal losses in its Sugar business. Excluding exceptional items, core earnings came in around US$215m, still down 32% YoY and 39% QoQ, meeting just 15% of our FY14 forecast. Revenue of US$10,268.6m (+1% YoY but down 12% QoQ) met 22% of our full-year forecast. And with China&rsquo s economy still looking somewhat uncertain, we place our Buy rating and S$3.65 fair value under review, pending an update from management later. CIMB Target S$3.47 (Stock Rating: HOLD)
Wilmar' s 1Q14 results were below expectations, its core net profit accounting for only 15% of our and consensus estimates. The key culprits were losses from its oilseeds and grains division, weaker refining margins and lower associates earnings. All except its consumer products and plantations segments posted weaker earnings. We lower our FY14-16 earnings forecasts by 10-22% and cut our SOP-based target price to S$3.47. We downgrade the stock to Hold from Add in view of the challenging oilseeds crushing business in China and lower refining margins, as well as weak 1Q results. Though the stock remains attractive from a P/BV valuation standpoint (1.1x CY14), it lacks re-rating catalysts, no thanks to the tough operating condition in China.
1Q results below expectations
1Q14 core net profit (excluding non-operating items) fell 32% yoy due to the weaker performance across all key divisions except plantations (driven by higher production and CPO prices) and consumer products (boosted by higher sales volumes and lower feedstock costs). 1Q reported net profit dropped at a deeper rate of 49% mainly due to net losses from investment securities (US$21.8m) and forex (US$31.4m). Key misses in 1Q14 The oilseeds and grains division posted a loss due to the negative crush margin of US$11.6 per tonne in China. The soybean crushing industry in China was impacted by the excessive import of soybeans, and lower demand for soybean due to the bird flu and a slower economy. The profit margin of US$28.9 per tonne for palm and laurics were also slightly weaker than expected due to lower refining margins. The other disappointments came from weaker sugar merchandising profit and a 60% drop in associates contributions. Downgrade to Hold We cut our FY14-16 earnings forecasts by 10-22% to account for lower crush and refining margins as well as weaker associates earnings. In view of the tougher-than-expected operating environment facing the group' s key businesses, we accorded a 10% discount to the group' s SOP in arriving at our new target price. We downgrade our rating to Hold as we feel the stock, though attractive at 1.1x P/BV CY14, currently lacks re-rating catalysts given its less than exciting earnings prospects. JPM:
Maintain UW, continued underperformance expected:
We believe it is unlikely that oilseeds margin would have seen recovery in 2Q14, and a 2H recovery is uncertain given rising risk of El Nino that could disrupt soybean supply and drive soybean feedstock cost higher. Furthermore margin pressure for palm & laurics may persist as industry overcapacity adds further stress. We roll our SOTP PT to Jun-2015 with a new PT of S$2.90. (Read Report)
UOBKH: 1Q14: Weak Quarter On Weak Margins
Wilmar&rsquo s 1Q14 results came in within expectations with core net profit of US$214.5m. Losses in oilseeds and grains division did not come as a real surprise but loss per tonne of US$11.6 was larger than expected due to oversupply of soybean and lower demand in China. Positive surprise came from stronger contributions from consumer packs, plantations & palm oil mill and associates. Expect better 2H14 results on higher sugar contributions. Maintain BUY. Target price: S$4.00. KIMENG : A seasonally weak quarter 1Q14 results were significantly below market expectations with core net profit down 31.6% YoY to USD214.6m. But most of the negative factors were due to seasonality, with the exception of CPO refining margin. Maintain BUY with a lower TP of SGD3.94 on 8% cut in FY14E net profit. Our target P/E multiple remains at 15x. Phillips : Wilmar International Ltd 1Q14 below on Oilseeds disappointment 1Q14 core net profit of US$214.6mn (-31.6% YoY, -39.2% QoQ) were below. Plantations performed better-than-expected, but offset by unexpected loss in Oilseeds & grains. Maintain " Accumulate&rdquo with new TP of S$3.61. |
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danytan
Master |
09-May-2014 14:57
Yells: "Up up and away!" |
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commodities have yet to rally |
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dginvest
Member |
09-May-2014 14:06
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Oh.. thought he was moving into other type of commodities like sugar.. good to know.
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lifeisgood
Supreme |
09-May-2014 13:27
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Palm oil and commodity business too tough. Wilmar boss Kuok already moving big time into property business. He has accumulated large stake in Yanlord and Perennial Holding. Peter Lim also sold his stake in Wilmar secretly, now into property business in Iskandar. Follow where the money goes. | ||
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SamuelJ
Member |
09-May-2014 12:27
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Heng I unloaded after last quarter' s result. The commodities sector is too risky and volatile. Wilmar is ultimately a very strong company and can weather through difficult times. Its shown in their balance sheets and dividends. One of the key component I see when buying a stock is their dividend payout. All the best to those still holding on to Wilmar. |
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dginvest
Member |
09-May-2014 12:05
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Thanks for the info! ... curious to see how market will react.... need to get some popcorns
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Blanchard
Master |
09-May-2014 10:36
Yells: "Winners cry..... Losers smile....." |
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Wilmar & First Pacific threaten to dump Goodman Fielder bid if Goodman Fielder proceeds with a plan to sell all or part of its New Zealand dairy business. 
http://adf.farmonline.com.au/news/nationalrural/agribusiness/general-news/threats-to-dump-goodman-bid/2697952.aspx?storypage=0 |
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danytan
Master |
09-May-2014 10:20
Yells: "Up up and away!" |
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just as volatile. up so much yet down so quickly. |
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