Wilmar

Wilmar: Deutsche notes the stock has declined over 20% in recent months, believes it now offers attractive risk/reward ratio. From a historical premium valuation of 30-40%, Wilmar is now trading at 15% discount to sector average. The house upgrades Wilmar from Hold to Buy, raises TP from $4.40 to $4.50. Highlights, current valuations of 12x PER and 1.2x PBR imply 1) zero value ascribed to oilseeds and grains and low-teen multiples for other divisions, 2) a lower valuation than at listing, despite an earnings CAGR of 73% and asset growth of 65%, and 3) a steep discount to the recent M&A deal priced at 20x PER. Says, although there is no clear sign of a strong earnings rebound in the near-term, Wilmar's long-term fundamentals remain intact given its market leadership in Asia.