May 12, 2017

Wilmar’s 1Q17 revenue increased 17% YoY to US$10,570m and met 24% of our FY17 forecast, as it was driven by higher commodity prices and stronger sales volumes for Tropical Oils and Sugar businesses.

Reported net profit rose 51% to US$361.6m while core net profit rose 40.5% to US$312.6m, which formed 27% of our full-year estimate, attributed to decent performance from Tropical Oils and Oilseeds & Grains segments as well as higher contributions from the group’s China associates.

Separately, the group is carrying out an internal restructuring of its China operations with the possibility of a separate listing. As the proposed listing is still at the evaluation stage, there is no certainty or assurance that it will happen. Recall that back in 2009, the group was evaluating the feasibility of listing its China operations but did not proceed with the listing then.

Pending more information from an analyst briefing later, we maintain our HOLD rating and S$3.70 fair value for now. –OCBC

Wilmar closed at: S$3.76