WILMAR INTERNATIONAL

WILMAR INTERNATIONAL | BUY

FAIR VALUE: $3.51

MARCH 8 CLOSE: $3.19

OCBC Investment, March 8

Looking ahead, crude palm oil (CPO) prices are likely to remain lacklustre.

India also recently raised import taxes on crude and refined palm oil, which is likely to dent imports.

India mainly imports palm oil from Indonesia and Malaysia, the world's top producers.

It is expected that the duty hike would narrow the difference between palm oil and soft oils such as soy oil and sunflower oil, which is likely to lead to increased demand for the latter two. Pure CPO upstream players are likely to be more impacted by this development in India, whereas more diversified players such as Wilmar, which also trades in other oils, are likely to be less impacted. Wilmar remains our preferred pick in the sector. HPRY Holdings, a company wholly owned by Kuok Khoon Hong, has also been acquiring shares in Wilmar – a total of about 3.3 million shares at an average of $3.107 per share since late last month.

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