Wilmar

Wilmar: DBSV maintains Hold but Cuts TP to $3.90 from $4.25. House expect Wilmar to book 2Q12 earnings of US$280-320m (+36-56% qoq) premised on a M&P pretax recovery; but softer contributions from Consumer/Sugar due to seasonally-lower volumes. House expect Indonesian Palm & Lauric processing margins to remain robust (2Q12 average refining margins had stood at US$87/MT vs US$67/MT in 1Q12); potentially offsetting weaker margins elsewhere. Oilseeds & Grains pretax is also anticipated to turn slightly positive – judging by the average daily China crush margins data. Compared yoy however, 2Q12 earnings should remain 21-31% below, given crushing overcapacity in China and the drop in CPO prices.