Wilmar

Wilmar: CLSA maintains Sell with $2.87 TP. House note that while China soy prices are finally starting to react slowly to the global supply failure in soy, global soy prices continue to rocket on, which should see yet another difficult qtr. Furthermore, China’s crushing capacity has grown by +43% over 3 yrs, driving utilization ratio down to a mere 50%. House see this leading to continued losses in oilseeds. A potential short-term trade is on the horizon, where any sharp correction in soy prices could lead to a potential oneoff profit for Wilmar. However, with the event still a while away, maintain SELL call, TP of $2.87.