• Wilmar remains positive on its outlook, given that the strong sales volumes and PBT margins from its tropical oils and oilseeds & grains segments are expected to sustain into 3Q18. We reckon Wilmar will continue to outperform its peers in the oilseeds and palm markets, given its larger market presence and size.
• We have adjusted our earnings forecasts downwards by 3% and 10% after factoring in consolidated contributions from Renuka Sugar.
• Maintain BUY. Target price: S$3.90.

What’s New

On track to deliver good earnings despite high market volatility.

Post briefing, we remains positive on Wilmar International’s (Wilmar) 2H18 outlook and it is on track to meet our expectation of a US$1.1b net profit for 2018 (1H18: core net profit of US$535m). 

We are expecting the tropical oils and oilseeds & grains segments to contribute about 82-85% of Wilmar’s 2018F PBT (2017: about 73% of PBT).

Source: UOB Kay Hian Research - 15 Aug 2018