Wilmar: Nomura maintain Neutral, TP $6.10, Upgrading earnings on sugar/Indo tax changes. Expect a strong quarter as Indonesian tax changes help, but the upside may be limited.
Estimate Q4 earnings growth of 268 % y-y (and 9% q-q), expect favourable tax changes in Indonesian palm refining to make up for weaker crushing margins. Sugar should be stable and price hikes may improve consumer-pack margins. Estimate it to be one of Wilmar’s strongest quarters ever, above a run rate of US$400m per quarter in 2011.
Tax changes benefit Indonesia, but not Malaysia/China. China will likely continue to drive Wilmar’s growth profile, while India, Indonesia, and Africa, although long-term catalysts, should become important markets for Wilmar.
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