Wilmar

Wilmar: JPM keeps at Neutral, but lifts TP to $3.30 from $2.80; tips a tradable bounce into 3Q12 results, though medium term challenges remain. Says sustained crush margin recovery may signal better 3Q/4Q12. Notes lower CPO price not completely bad news as it may actually favor the larger palm & laurics segment via lower feedstock cost and lower working capital financing cost that it incurs per MT of CPO. Adds, sugar contribution will also give 3Q/4Q12 a boost. Notes medium term challenges remain but believes share price has found support at $3 following recent share buyback in Sep. Believes an in-line 3Q12 result of ~US$300m may be sufficient to catalyze near term share price outperformance. Raises earnings estimates for FY12E by 9% largely driven by higher oilseeds & grains PBT/MT margin assumptions (FY12E from US$-15 to US$-5); expects losses to narrow with 2H12 potentially registering profits. Wilmar is +3.3% at $3.16.