Between Sep 22 and 27, Wilmar International : F34 +0.27% chairman and CEO Kuok Khoon Hong increased his deemed interest in the global agri-business from 13.44 per cent to 13.46 per cent. This saw Longhlin Asia Ltd acquire 594,800 shares and Hong Lee Holdings (Pte) Ltd acquire 594,800 shares. The 1,189,600 shares were all acquired at an average price of S$3.70 per share.

Between Sep 19 and Sep 21, Wilmar International : F34 -0.27% chairman and CEO Kuok Khoon Hong increased his deemed interest in the global agri-business from 13.42 per cent to 13.44 per cent. This saw Jaygar Holdings acquire 250,000 shares, Longhlin Asia acquire 258,350 shares and Hong Lee Holdings acquire 258,350 shares. The 766,700 shares were all acquired at S$3.69 per share.

 

Kuok&rsquo s preceding acquisitions were between Sep 8 and Sep 11, with 1,456,500 shares at S$3.66 per share. Before that, 877,100 shares were acquired at an average price of S$3.55 on Aug 25.

 

Kuok has extensive experience in the agri-business industry and has been involved in the grains, edible oils, and oilseeds businesses since 1973 and has served as the chairman of Wilmar International since July 2006. He has gradually increased his total interest in Asia&rsquo s leading agribusiness group, from 12.20 per cent in May 2017.

 

Wilmar International is organised into four reportable operating segments, which include food products, feed and industrial products, plantation and sugar milling and others, which includes the group&rsquo s logistics & jetty port services and investment activities.

 

In its H1 FY23 (ended Jun 30), the feed and industrial products contributed 54 per cent of revenue, with food products contributing 42 per cent. Higher volume of sales across all the main businesses of the feed and industrial products led the segment to report an improvement in overall sales volume by 12.7 per cent to 27.9 million MT in H1 FY23.

 

The overall sales volume for the food products also grew by 5.5 per cent to 14.6 million MT for H1 FY23, with stronger sales volume recorded for its medium pack and bulk products. While both segments reported higher sales volume, both reported declines in H1 FY23 profit from H1 FY22.

 

For feed and industrial products, this was mainly due to much lower margins for the mid and downstream tropical oils operations. For food products, this was due to unfavourable sales mix, lower sales volume from its consumer products and weaker margins, because of high feedstock costs for the flour business. For the H1 FY23, 52 per cent of the revenue was reported to China.

 

Wilmar International also announced last week that Wilmar&rsquo s board of directors had appointed its independent non-executive director Jessica Cheam as a member of its Board Sustainability Committee, with effect from Oct 1, 2023.

 

INSTITUTIONS were net sellers of Singapore stocks over the five trading sessions through to Sep 21, with S$205 million of net institutional outflow, while 24 primary-listed companies conducted buybacks with a total consideration of S$22.1 million.

 

OCBC : O39 +1.04% led the share buyback consideration tally, buying back 1.2 million shares at an average price of S$12.67 per share, followed by Olam Group : VC2 0%, which bought back 2.7 million shares at an average price of S$1.08 per share. StarHub : CC3 +2.75% also bought back 1.28 million shares at an average price of S$1.09 per share.

 

Leading the net institutional outflow over the five sessions were DBS : D05 +0.09%, UOB : U11 -0.14%, Thai Beverage : Y92 -0.88%, OCBC, Keppel Corporation : BN4 +0.15%, Frasers Logistic & Commercial Trust : BUOU -0.89%, Singapore Airlines : C6L -0.15%, Seatrium : S51 0%, CapitaLand Investment : 9CI +0.97% and CapitaLand Integrated Commercial Trust : C38U -1.06%.

 

Singtel : Z74 0%, Singapore Exchange : S68 -0.41%, Mapletree Industrial Trust : N2IU -1.36%, Digital Core Reit : DCRU -2.75%, Sembcorp Industries : U96 -0.2%, CapitaLand Ascendas Reit : A17U -0.36%, Mapletree Pan Asia Commercial Trust : N2IU -1.36%, AIMS Apac Reit : O5RU -0.77%, Yangzijiang Financial Holding and DFI Retail Group : D01 -1.1% led the net institutional inflow over the five sessions.

 

The five trading sessions saw another 60 changes to director interests, and substantial shareholdings filed for close to 30 primary-listed stocks. This included 14 company director acquisitions with one disposal filed, while substantial shareholders filed 11 acquisitions and four disposals.

Wilmar International chairman and CEO Kuok Khoon Hong increased his deemed interest in the company following the release of its FY22 (ended Dec 31) financial results.

 

Over the four sessions, HPRY Holdings acquired 5,635,200 shares, Longhlin Asia acquired 1,630,900 shares and Hong Lee Holdings acquired 1,630,900 shares.

 

The 8,897,000 shares were acquired at an average price of S$3.64. The consideration of the acquisitions totalled S$32,421,859, increasing Kuok&rsquo s total interest in Wilmar from 13.24 per cent to 13.38 per cent.

 

Kuok is deemed to be interested in Wilmar shares held by HPRY Holdings, HPR Investments, Hong Lee Holdings, Kuok Hock Swee & Sons, Longhlin Asia, KHS (Hong Kong) (formerly known as Pearson Investments), Jaygar Holdings, through trust accounts controlled by him and through his spouse Yong Lee Lee.

 

His preceding acquisition was on May 31, with Longhlin Asia and Hong Lee Holdings both acquiring 1.5 million shares of Wilmar at an average price of S$3.907 per share.

 

Kuok has extensive experience in the agribusiness industry and has been involved in the grains, edible oils, and oilseeds businesses since 1973. He has served as the chairman of Wilmar International since July 2006.

 

Prior to the acquisitions, on Aug 11, Wilmar reported a net profit of US$550.9 million for its H1FY23 (ended Jun 30), compared to its record US$1.16 billion in H1FY22.

 

Revenue for H1FY23 declined 10 per cent to US$32.54 billion from H1FY22, as prices of most commodities decreased, which was partially offset by higher sales volume during the period.

 

Kuok noted that most of Wilmar&rsquo s markets, except for India, experienced a slowdown in Q2FY23.

 

He added that the results were further impacted by lower palm oil and fertiliser prices, as well as lower processing margins for the group&rsquo s mid and downstream operations and that this was partially offset by strong performance from the sugar and shipping divisions.

 

He also maintained that the group has made good progress in its new businesses such as condiments, food park, and central kitchen projects which he believes will become significant contributors to the group&rsquo s operations in future.

 

Barring unforeseen circumstances, the group believes H2FY23 will be better than H1FY23. The global leader in processing and merchandising of edible oils, oilseed crushing, sugar merchandising, milling, and refining, production of oleochemicals, specialty fats, palm biodiesel, flour milling, rice milling, and consumer pack oils employs a workforce of around 100,000.

 

INSTITUTIONS were net buyers of Singapore stocks over the five trading sessions through to Aug 17, with S$256 million of net institutional inflow, while 21 primary-listed companies conducting buybacks with a total consideration of S$36 million.

 

DBS, UOB, Singapore Technologies Engineering, OCBC, Seatrium, Singapore Exchange, Mapletree Logistics Trust, Yangzijiang Shipbuilding, ComfortDelGro Corporation and HongkongLand led the net institutional inflow over the five sessions.

 

Meanwhile, Venture Corporation, Singtel, Frasers Logistics & Commercial Trust, Sats, Jardine Matheson, City Developments, Sembcorp Industries, Suntec Reit, Keppel Corporation, and Nanofilm Technologies International led the net institutional outflow over the five sessions.

 

The five trading sessions saw 90 changes to director interests and substantial shareholdings filed for close to 50 primary-listed stocks.

 

This included 15 company director acquisitions with one disposal filed, while substantial shareholders filed 11 acquisitions and seven disposals.

 

Acquisitions were filed for directors/chief executives of Wilmar International, Datapulse Technology, QAF, JB Foods, Annaik, Baker Technology, Sinostar Pec Holdings, United Hampshire US Reit, Yangzijiang Financial Holding, Bonvests Holdings, Elite Commercial Reit, Ascent Bridge and Darco Water Technologies

 

Wilmar is among the world&rsquo s largest palm oil processors and is China&rsquo s biggest soybean processor. 

SINGAPORE &ndash Trouble could be brewing for agri-commodities processor Wilmar International as financing costs rise and profits come under pressure from greater competition, analysts said.

 

Wilmar&rsquo s net debt &ndash US$26.6 billion (S$36.1 billion) as at June 30 &ndash is among the highest on the Singapore Exchange and exceeds the firm&rsquo s market value of $23 billion, noted Aletheia Capital analyst Nirgunan Tiruchelvam this week.

 

Aletheia Capital, an investment company, has a sell recommendation on Wilmar, and its profit forecasts for the 2023 financial year are 40 per cent below consensus estimates. There are 13 buy calls and two holds on Wilmar, noted Bloomberg.

 

While it is not unusual for commodity traders to have higher debt levels than companies in other industries owing to the need to manage inventory levels and price volatility, Mr Tiruchelvam warned that Wilmar&rsquo s high debt means interest rate expenses could spike and put further strain on earnings.

 

The analyst estimated that Wilmar&rsquo s net interest costs could hit a high of US$760 million this financial year, up from US$253 million in 2021.

 

Meanwhile, Wilmar&rsquo s return on invested capital has lagged behind its average cost of capital in recent years, Mr Tiruchelvam said, a trend he expects to continue over the next three years.

 

He noted that Wilmar incurred capital expenditure in 2022 of around US$2.5 billion, which encompassed the construction of new palm oil refineries. Palm oil prices were already falling, and are now down by more than 50 per cent since last year, owing to mounting inventories in Malaysia and Indonesia.

 

Global soybean production is also expected to hit record levels at a time when demand has waned in India, one of the world&rsquo s largest importers. Soybean futures are down by 17 per cent from their 2018 peak.

 

Futures prices reflect market expectations about the forward prices of underlying assets.

 

Wilmar is among the world&rsquo s largest palm oil processors and is China&rsquo s biggest soybean processor, which also means it carries larger inventories that could be at risk of devaluation if demand falls, Mr Tiruchelvam said.

 

A Wilmar spokesman told The Straits Times that the bulk of the company&rsquo s debt comprises short-term trade financing facilities used to obtain raw materials, and these loans can be obtained in currencies with lower interest rates, such as the yuan.

 

He added that besides debt financing, Wilmar also deploys internally generated funds for capital expenditure.

 

Last Friday, Wilmar reported earnings of US$550.9 million for the first half ended June 30, down 52.7 per cent from the same period last year, while revenue fell 10 per cent to US$32.5 billion.

 

The company said net loans and borrowings decreased, leading to an improvement in its net gearing ratio to 0.89 times in the first half, from 0.94 times in 2022.

 

The ratio assesses how much a company relies on debt to finance its operations and investments compared to its own funds.

 

Chairman and chief executive Kuok Khoon Hong said the 2023 first-half results were significantly lower than the first half of 2022 due to a slowdown in sales of its consumer products, lower palm oil prices as well as lower processing margins at some of its refineries. Operating costs also rose.

 

Despite the lower earnings, Wilmar maintained an interim dividend of six cents a share.

 

Mr Kuok expects the second half of the year to improve as Wilmar&rsquo s new condiments and central kitchen businesses begin to contribute more to revenue.

 

The spokesman added that the second half is typically stronger than the first &ldquo due to seasonal holidays in China, such as Mid-Autumn Festival, Golden Week as well as consumers stocking up ahead of Chinese New Year&rdquo .

 

Companies in which Mr Kuok has a deemed interest in purchased around 8.9 million Wilmar shares at between $3.56 and $3.695 apiece this week, taking his deemed stake from 13.19 per cent to 13.38 per cent.

 

The shares closed on Friday at $3.60, up 0.28 per cent, but they have fallen 12.41 per cent since the start of the year.

 

At those levels, Mr Tiruchelvam noted that Wilmar stock is overvalued in light of the faltering returns, poor earnings growth and rising risks, and should be worth just $2.58 in the next 12 months.

 

Kuok Khoon Hong, chairman and CEO of Wilmar International, has seen an increase in his stake in the company. On Aug 16, about 3.46 million shares were purchased on the open market at around $3.6 each on behalf of Kuok by three investment companies in which he has deemed interests. On Aug 15, a million shares were bought at $3.64 each and on Aug 14, just over four million shares were bought at around $3.70 each.

 

Following these purchases, Kuok has a total interest of about 834.9 million shares, equivalent to 13.38% of the company.

 

The last time Kuok saw an increase in his stake was on May 31 when the same three investment companies acquired 3 million shares on the open market at an average price of $3.907 each.

 

Kuok&rsquo s latest stake increase comes after Wilmar reported weaker earnings in 1HFY2023 ended June 30, leading to a decline in its share price recently. On Aug 1, Wilmar reported earnings of US$550.9 million ($747.5 million) in 1HFY2023 ended June, down 52.7% y-o-y from US$1.16 billion recorded in 1HFY2022. Revenue in the same period was down 10% y-o-y to US$32.5 billion.

 

The company attributes the weaker numbers to lower selling prices despite moving a higher volume of goods. Despite lower earnings, Wilmar plans to maintain its interim dividend at 6 cents per share.

 

In his earnings commentary, Kuok says that the company has made &ldquo good progress&rdquo on various new businesses like condiments which he expects should become significant contributors in the future. &ldquo Barring unforeseen circumstances, we believe 2H2023 will be better than 1H2022,&rdquo says Kuok.

 

Share buybacks help lift EPS

 

Yangzijiang Financial Holding (YFH) has resumed its share buybacks. This follows the announcement of higher 1HFY2023 ended June earnings compared to 1HFY2022, thanks to a higher fair valuation of its investments.

 

On both Aug 14 and Aug 16, YFH acquired 3 million shares at 36 cents each. This brings the total number of shares bought back under the current mandate to nearly 30.1 million shares.

 

The buybacks were done days after YFH on Aug 12 reported earnings of $162.5 million for 1HFY2023, up 19.2% y-o-y. Total income in the same period was up 14.2% y-o-y to $198.4 million, boosted by a net gain of $34.5 million in fair value of financial assets versus a fair value loss of $19 million in 1HFY2022.

 

In addition to the buybacks, two of the company&rsquo s independent directors added to their respective stakes on Aug 14 as well. Chua Kim Leng bought 100,000 shares, bringing his total to 300,000 shares. Chew Sutat, who already held one million shares, bought 88,000 more. Both paid 36 cents for each share.

 

YFH was spun off Yangzijiang Shipbuilding in a listing of its own in April 2022. Just a month after the listing, YFH announced a $200 million share buyback programme.

 

As a result of the series of buybacks, its share base has been reduced by 6.2% as at June 30. Coupled with higher earnings, this has the effect of increasing its 1HFY2023 earnings per share by 27.2% y-o-y to 4.39 cents. In contrast, EPS for whole of FY2022 was 4.22 cents.

 

As at June 30, YFH&rsquo s net asset value per share was $1.052 versus $1.0495 as at Dec 31, 2022. Accordingly, YFH is trading at a 64.8% discount off its book value as at its Aug 15 close of 37 cents.

 

At the time of its listing, the bulk of YFH&rsquo s assets were in the form of short-term debt investments in China. By listing in Singapore and operating here as well, it wants to build an investment and wealth management platform outside China.

 

YFH&rsquo s executive chairman Ren Yuanlin says the &ldquo robust&rdquo 1HFY2023 performance can be attributed to the &ldquo meaningful headway&rdquo the firm has made in reducing its non-performing loans as well its diversification strategy. &ldquo

 

Our Singapore investments have started to contribute positively to the group&rsquo s bottom line in this financial period and we expect contributions from this segment to continue growing in the foreseeable future,&rdquo he adds.

Kuok Khoon Hong, chairman and CEO of Wilmar International, has seen an increase in his stake in the company. On Aug 16, about 3.46 million shares were purchased on the open market at around $3.6 each on behalf of Kuok by three investment companies in which he has deemed interests. On Aug 15, a million shares were bought at $3.64 each and on Aug 14, just over four million shares were bought at around $3.70 each.

Following these purchases, Kuok has a total interest of about 834.9 million shares, equivalent to 13.38% of the company.
The last time Kuok saw an increase in his stake was on May 31 when the same three investment companies acquired 3 million shares on the open market at an average price of $3.907 each.

Kuok&rsquo s latest stake increase comes after Wilmar reported weaker earnings in 1HFY2023 ended June 30, leading to a decline in its share price recently. On Aug 1, Wilmar reported earnings of US$550.9 million ($747.5 million) in 1HFY2023 ended June, down 52.7% y-o-y from US$1.16 billion recorded in 1HFY2022. Revenue in the same period was down 10% y-o-y to US$32.5 billion.

The company attributes the weaker numbers to lower selling prices despite moving a higher volume of goods. Despite lower earnings, Wilmar plans to maintain its interim dividend at 6 cents per share.

In his earnings commentary, Kuok says that the company has made &ldquo good progress&rdquo on various new businesses like condiments which he expects should become significant contributors in the future. &ldquo Barring unforeseen circumstances, we believe 2H2023 will be better than 1H2022,&rdquo says Kuok.

 

Analysts from OCBC Investment Research (OIR), RHB Bank Singapore, CGS-CIMB Research and Citi Research have all maintained their &ldquo buy&rdquo and &ldquo add&rdquo calls to Wilmar International despite its weak earnings performance of US$550.9 million ($747.81 million) for 1HFY2023, down 52.7% y-o-y.

 

All the brokerage houses are looking forward to a more profitable 2HFY2023 for Wilmar as it continues to benefit from China&rsquo s slower-than-expected recovery.

 

However, they have all trimmed their target prices, reflecting a more conservative outlook on Wilmar. OIR has lowered it from $4.74 to $4.42, RHB has lowered it from $4.65 to $4.25, CGS-CIMB has lowered it from $4.63 to $4.05, and finally Citi has lowered it from $5.35 to $4.38.

 

Wilmar&rsquo s lacklustre performance was mainly due to a 10% decline in revenue as prices of most commodities decreased, causing lower margins across their key segments, as well as a softer consumer demand in China.

 

OIR analysts highlight that segmental performances were weighed down by weaker margins, where Wilmar&rsquo s pre-tax profit (PBT) for food products decreased by 84% y-o-y to US$82.7 million in 1HFY2023.

 

This was largely due to unfavourable sales mix, lower sales volume from consumer products, as more people resumed dining out and weaker consumer demand in China, together with weaker margins from 3.3% in 1HFY2022 to 0.6% in 1HFY2023, as a result of high feedstock costs for the flour business.

 

The analysts note that the higher priced feedstock inventory has been normalised, leading to better margins in July and Aug 2023 for the flour business.

 

Feed and industrial products&rsquo PBT fell 21% y-o-y to US$399 million in 1HFY2023, due to lower margins for the mid and downstream tropical oils operation.

 

This was further dragged by weak crush margin as a result of lower demand from the poultry and hog industries and elevated soybean prices in 2Q2023, although partially offset by stronger sugar merchandising and shipping operations, say the analysts.

Separately, plantation and sugar milling business&rsquo PBT was down 86% y-o-y to US$62.9 million with weaker performance across palm plantation and sugar milling operations due to lower palm oil prices, lower fresh fruit bunch production and weaker volume of sugar sales in 1HFY2023.

 

OIR analysts note that Wilmar&rsquo s management has guided for a better 2HFY2023, on the back of improved margins as soybean crush margin returned to positive in July, with improvements in animal feed demand.

 

&ldquo Following the results, we revise our growth and margin estimates. Correspondingly, our fair value estimate decreases from $4.74 to $4.42,&rdquo they say.

 

Similarly, RHB analysts note that 1HFY2023 core profit was below expectations, at 32%-35% of FY2023, due to lower-than-expected margins for all divisions amidst a slower-than-expected pick up in China&rsquo s demand post uplift of lockdowns.

 

RHB analysts warn that despite inventory normalising in 2H2023, the situation could still be upended by further increases in raw material prices, especially with the ongoing geopolitical conflict.

 

They also cut their margin assumptions for oilseeds and grains, to reflect the 1HFY2023 results, and note that supply risks for plantation and sugar milling divisions remain in the form of El Nino.

 

As a result, RHB analysts have trimmed their FY2023-FY2025 earnings estimates by 3%-28% after reducing their food product, tropical oils, oilseeds and grain margins.

 

However, they expect 2HFY2023 to perform better in terms of margins and average selling prices (ASPs), although they are wary of geopolitical risks.

 

&ldquo Despite the weak results, we believe the stock remains undervalued &ndash trading at 10x FY2024 P/E vs China-listed peers&rsquo 20x-40x, while its combined stake in Yihai-Kerry and Adani Wilmar is almost double that of its own market capitalisation,&rdquo they add.

 

Likewise, Tay Wee Kuang and Lim Siew Khee from CGS-CIMB say that they have reduced their sum-of-the-parts based target price after reducing its FY2023/FY2024/FY2025 earnings per share (EPS) estimates by 28.6%/17.3%/5.0%, as they expect Wilmar to slowly return to pre-Covid-19 profitability.

 

Tay and Lim believe that the weak consumer sentiment in China will not be able to support cost pass-through in the near term, while near-term cost pressures remain as it will take time for higher-priced feedstock such as wheat to be absorbed.

 

Although they think that sales volumes are likely to continue growing, Wilmar&rsquo s FY2023 profitability may continue to be weighed down.

 

Noting a share price weakness in Wilmar&rsquo s listed subsidiaries, Yihai Kerry Arawana and Adani-Wilmar, their target price has been reduced to $4.05.

 

&ldquo We see limited catalysts in the near term due to volatility of raw material costs, as well as overhang from the recent news of Adani looking to sell its 44% stake in Adani-Wilmar,&rdquo they say. &ldquo Nevertheless, we think Wilmar will continue to benefit from the progressive recovery in China&rsquo s economy.&rdquo

 

Finally, Citi analyst Jame Osman says that he continues to view Wilmar as a recessionary and inflationary hedge, and a China reopening play.

 

He looks to a better 2HFY2023 driven by sales volume recovery as he notes that Wilmar&rsquo s management has shared that it has observed an improvement in demand in the market with 1HFY2023 marking a bottom, resulting in an expectation of a better 2HFY2023 h-o-h.

 

He notes that the magnitude of recovery will unsurprisingly be tied to China&rsquo s macro backdrop.

 

However, unlike the few analysts before him, Osman thinks that El Nino weather impact is an upside tail risk for Wilmar, as higher prices will ultimately benefit their upstream and refining margins.

 

Osman cuts his FY2023-FY2024 EPS forecasts by 38%/18%/11%, mainly after tempering his margin assumptions to factor 1HFY2023 trends.

 

His new lowered target price is based on a target multiple of about 12x (about 1 standard deviation (s.d.) below past 10-year mean of about 14x previously, to reflect the near-term uncertainty around consumption recovery.

 

&ldquo Our positive mid- to longer-term structural view of Wilmar and its business model remains intact, considering its positioning as an integrated and diversified food producer in two of the largest consumer growth markets of China and India,&rdquo he says. &ldquo Valuations remain inexpensive, with the stock trading at FY2024 price earnings ratio of 9x > 1 s.d. below the past 10-year mean of 14.2x.&rdquo

 

ALETHEIA Capital has initiated coverage on Wilmar International : F34 -3.94% with a &ldquo sell&rdquo call and a price target of S$2.58, citing &ldquo faltering returns and poor earnings growth&rdquo .

 

As at the time of the report&rsquo s release on Monday (Aug 14), analyst Nirgunan Tiruchelvam noted that this is the first &ldquo sell&rdquo call for Wilmar, alongside 13 &ldquo buy&rdquo calls and two &ldquo hold&rdquo ratings according to Bloomberg.

 

The price target implies 9.9 times the stock&rsquo s EV/Ebitda (enterprise value to earnings before interest, taxes, depreciation and amortisation) multiple based on Alethia&rsquo s FY2024 forecasts.

 

At S$3.81, Tiruchelvam noted that Wilmar is trading at 11.4 times EV/Ebitda, which is slightly higher than the sector median. This premium is unwarranted, in his view.

 

Among the analyst&rsquo s concerns is the agribusiness group&rsquo s highly indebted position as at H1 FY2023, which makes the stock&rsquo s net debt the highest on the Singapore Exchange.

 

This would leave the company vulnerable to potential carry trade and interest rate hikes, said Tiruchelvam.

 

He estimated that the recent spike in interest rates could raise Wilmar&rsquo s net interest expense in FY2023 to US$760 million, compared with US$253 million in FY2021.

 

Although Wilmar&rsquo s management stated that such net debt could be set off against its readily-marketable inventory, Tiruchelvam believed this possibility &ldquo could be challenged in a potential bear market for soft commodities&rdquo .

 

The analyst also highlighted the &ldquo dangerous&rdquo unwinding risk of the US dollar-renminbi carry trade.

 

&ldquo A widening of the US dollar-renminbi carry trade to an interest rate spread of 4 per cent, from 3.3 per cent base case, could cut Wilmar&rsquo s FY2023 net income by 16 per cent. A widening to 4.8 per cent could shave off a third of its earnings.&rdquo

 

Lastly, Tiruchelvam said how the stock&rsquo s returns have lagged behind its average capital cost for most of the past five years due to &ldquo excessive investment&rdquo in the refining business.

 

He foresees this trend continuing into FY2023 to FY2025 amid weak refining and processing margins, as well as higher capital expenditure for its processing assets.