Wilmar

Wilmar: CLSA cites the $3/share floor price has been reaffirmed, as the company stepped in last week to purchase $11.3m worth of shares. Given that current treasury shares only makes up 0.1% of total issued shares, there is plenty of headroom for further defence. In addition, Wilmar is now -1 std dev below historical average valuations on both PE and PB basis, and is now trading below book value at 0.9x PB. The last time it traded at 0.9x PB during early Feb’14, it rallied 14% to $3.54/share on the back of strong 4Q14 results release drove share price up +14% over the space of 1 month. With soy prices having collapsed in recent months, CLSA expects this to be a big beneficiary for Wilmar’s 3Q14 results. House estimates that Wilmar should see extremely positive soy crush margins, and expects overall crush margins to improve from $0.7/t in 2Q14 to $14/t in 3Q14. CLSA maintains Outperform with TP of $3.38.