Wilmar

Wilmar - Deutsche downgraded the stock to sell this mornign with TP of $2.00. The house highlights that RMB depreciation and rate cuts, combined with a potential rate hike in the US, will reverse Wilmar's interest abritrage profit on 2016. Note that WIL recorded net interest income of US$77mn in FY14 despite net debt of US$15b. Deutsche cuts FY16 EPS by 13% in anticipation of potential interest cost normalization. Downgrade WIL to Sell on the basis of negative FY16E earnings growth and a potential de-rating due to reduced transparency.