Wilmar International Limited (WIL) was queried by the SGX yesterday for the reason behind its share price jump of nearly 9% and the company replied that its substantial shareholder ADM (Archer-Daniels-Midland) has raised its stake in the company; ADM made purchases representing some 22% of the total volume of WIL traded on the SGX yesterday. WIL added that it will be updating the shareholding of ADM in due course – ADM held an 18% stake as of Mar 2015 according to Bloomberg data.

We believe that the recent fall in WIL’s share price was overdone (hit an intraday low of S$2.51) and value was emerging below S$2.80. While we had recently reiterated our BUY call (23 Sep report), we had lowered our fair value to S$3.17 as well. Hence we are in the process of reviewing our rating and fair value once we get more clarity from management. Note that WIL is due to report its 3Q15 results on 11 Nov.

Source: OCBC Research - 21 Oct 2015