Wilmar: Europacific Capital initiates at Buy with TP $5.80, based on an FY14E EV/EBITDA of 9x. The house is bullish on the outlook for palm oil; notes Wilmar is the largest or near largest in numerous markets, including palm oil processing, palm biodiesel processing, and sugar pdtn in Australia. Adds, Wilmar is the largest oilseed crusher and one of the largest wheat and rice millers in China, which provides its upstream operations with end mkt intelligence and giving it a significant advantage over competitors.
The house likes Wilmar’s strong history of acquiring and developing assets cheaply. Believes there are opportunities for operational synergies with its consumer division and its sugar division, acquired in 2010. Adds, Wilmar has been astutely growing in Africa, where Olam has recently stated offers twice the returns of Asia.
The stock is up 1.6% at $5.06.
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