Wilmar

Wilmar: to buy 20% of Msian flour mill operator FFM Bhd, a subsidiary of Wilmar's parent PPB Group. Wilmar plans to then sell 20% of some of its selected subsidiaries in China to a unit of FFM, Waikari, through an MOU. Wilmar did not indicate how many subs it plans to sell, or the selling price, but the units would have the same core biz as FFM, which is grains trading, processing and sale of flour & feed pdts in China…

Wilmar operates 5 flour mills in China that have a total capacity of 5k tons per day (tpd), and is building several new mills in China, as well as planning to expand into Indonesia and Vietnam. FFM has 7 flour mills in SE Asia with a combined total capacity of 4.1k tpd. The two transactions would provide FFM with exposure to Wilmar's distribution in the markets of China, Indonesia and Vietnam, while Wilmar would benefit from FFM's technical and marketing expertise….

News may be positive for Wilmar’s share price, which has corrected ~15% from the recent $6.93 peak. UBS, Deutsche recently recommended longer term investors to accumulate on weakness.