Commodities Trader/Processors

Commodities Trader/Processors: Nomura has midstream earnings preview for SGX commodities traders/processors in Olam, Wilmar, Noble and Mewah. Tip Olam’s momentum to continue, and continued positive newsflow around its Ivory Coast and Gabon project should help its performance….

Expect Wilmar to return to positive crush margins, which could help near term performance, but street’s FY11 estimates still have downside potential. Tip Noble’s 1Q11 performance to be muted as this is a seasonally low-harvest qtr in Agri, but mgt should offer a positive outlook for the rest of the yr. Forecast Mewah to deliver in-line results, and add that stock continues to look attractive and undervalued.

Asia Agriculture: UBS removes GoldenAgri and add First Resources from house most preferred list of plantation stocks. Note that First Resources is the most resilient to downside risk because of its more attractive production growth profile. Add that
First Resources is entering a phase of high production growth with a CAGR of 12% from 2010 to 2015, through acquisition of significant land bank…..

Add that rising CPO price by every US$100/t adds US$26m to grp’s Net Profit. Also Positive on London Sumatra and KL Kepong. Olam and Wilmar are house least preferred names.