Wilmar

Wilmar: In its 2012 annual report, Wilmar highlighted its long-term strategy to focus on greenfield projects with high potential despite the longer gestation. Key expansion will be in the fast-emerging markets in Africa - Ghana and Nigeria. House expect lower refining margins for 2013 but will be compensated by the expanded capacity in Indonesia, which is widely expected by the market. Grp aims to sustain its market leader position in consumer packs cooking oil, soybean crushing in China and the global palm oil consumption market. Capex gong forward will be focused on new markets, especially in Africa, to grow its palm upstream operations, palm value chain and consumer packs. Its investment in Africa’s palm upstream operations should start to see contribution in three years’ time. The geographical diversification is to reduce dependency on China, which saw its share of revenue contribution drop from 55% in 2009 to 47% in 2012. While Asean was the main driver in the last three yrs, India, Eastern Europe and Africa will drive revenue going forward. Overall, UOB Kay Hian maintains Buy with $3.80 TP, based on SOTP methodology, implying a blended PE of 13.6x 2013F, below its historical mean of 14.8x 1-year forward P/E.