Wilmar

Wilmar: Nomura upgrades to Buy from Neutral. See Wilmar's crush margins remaining volatile, in line with global players, but expect palm-refining margins to be more stable (as Wilmar controls the market) and believe it could get a higher multiple. Believe current valuations provide a very good entry point, but it says organic growth concerns persist as most current segments have high market-shares, while its downstream business is too small to move the needle. Add that it would like to see more aggressive M&A. Given its expertise in oilseeds and sugar, believe it should expand in South America (natural fit) rather than restrict itself to small asset acquisitions in Australia. Think expanding downstream in Asia makes sense as Wilmar already has a strong distribution franchise. Cuts TP to $4.60 from $5.60, after rolling over to FY13 forecasts and lowering target P/E multiples for several segments, in line with comparable peers.