Wilmar

Wilmar: CIMB maintains O/p with $3.74 TP. During house conference, Wilmar revealed that 2Q earnings may be weaker qoq as bird flu has led to a drop of around 10-20% in soya meal demand in China and refining margin may weaken when new refining capacity comes onstream in Indonesia. There is also concern that sugar profitability may be diluted as sugarcane yield from its mills may be hit by the "yellow canopy syndrome" disease. But these are short-term negatives that do not shake house Outperform rating, which is underpinned by its cheap FY12 P/BV of 1.2x vs. the historical average of 2.1x.