Wilmar

Wilmar: UOB Kay Hian upgrades to Buy with $6.00 TP, after house upgraded the regional plantation sector to OVERWEIGHT.
Note that after the disappointing 4Q11 results, Wilmar had a sharp share price correction, and house believe the bulk of the bad news has now been factored in. Recommend investors should look beyond this and focus on Wilmar’s good assets.

Tip Wilmar to be one of the beneficiaries of rising plantation landbank prices in Malaysia and Indonesia as it is the second-largest plantation landbank owner with 610,000ha of land worth about US$4.2b ($0.81/share) based on current market prices in Malaysia and Indonesia.

As the largest listed oil palm plantation company, Wilmar will also benefit from the expected rise in crude palm oil (CPO) prices on softening production growth and firm soybean oil prices.