• BUY Entry – 4.20 Target – 4.38 Stop Loss – 4.11
  • Wilmar is Asia’s leading agribusiness group that encompasses the entire value chain of the agricultural commodity business, from cultivation and milling of palm oil and sugarcane, to processing, branding and distribution of a wide range of edible food products in consumer, medium and bulk packaging, animal feeds and industrial agri-products such as oleochemicals and biodiesel.
  • Crude palm oil: The new wave. Seasonally, December has been a strong month for crude oil prices. Malaysian palm oil futures bounced back above MYR 4,900 per tonne in early December but have pulled back slightly below MYR 4,800 per tonne yesterday. Malaysia’s palm oil stockpile at the end of November likely fell 3.5% from the previous month to a four-month low of 1.77mn tonnes. At the same time, production likely rose 1%, while exports were forecast to grow 11.9%. The sell-off last week caused palm oil to hit the lowest level since early October, as investors feared the Omicron variant could further hit the global economic recovery. However, palm oil prices are likely to recover as Omicron fears subside, coupled with the supply and demand dynamics moving into the season. 

            Generic 1st Crude Palm Oil (K01 Comdty): December 2020 rally

  • Aggressive share buy-backs. The company had been buying back tranches of shares over the last month and into December.
  • Positive consensus estimates. Wilmar currently has a rating of 13 BUYS and 0 HOLD and SELL, with a 12M TP of S$5.98, representing an upside potential of 41.7% as of yesterday’s closing price of S$4.22.