12-09-2013, 01:49 AM (This post was last modified: 12-09-2013, 01:30 PM by yccheok.)
Another alternative vehicle to invest in Wilmar is that, invest in its parent company PPB. PPB is listed in Malaysia stock exchange. Besides holding ~18% of Wilmar shares, it is operating several very good business
Flour business (Market leader in Malaysia)
Cinema business (Market leader in Malaysia)
Bread business
Other side business like property development, waste water treatment, food processing like chicken nugget, curry paste, egg, ...
Especially good buy timing, as SGD to MYR is all time high right now.
12-09-2013, 01:04 PM (This post was last modified: 14-09-2013, 11:23 PM by freedom.)
such indirect exposure is not necessarily advantageous as even if Wilmar jumps 100%, it does not really matter to PPB that much from a cash flow perspective. The dividends might increase, but most of the profit stays in Wilmar. It is unlikely that PPB will sell their stake in Wilmar to realize value for minority shareholders.
14-09-2013, 11:19 PM (This post was last modified: 14-09-2013, 11:20 PM by candy188.)
Favourable analyst reports from JP Morgan & TA Securities.
Plantation Sector
A Milder Stocks Build up
Overweight
TA Securities, 11 Sep 2013
An Orderly Stocks Build Up The drastic increase in stocks in the Sept/Nov period last year will likely to be absent this year. All in, we estimate stocks could increase to 1.78mn – 1.80mn tonnes at the end of Sept this year (Sept 2012: 2.48mn tonnes), barring any export shock. This factor is supportive of our 4QCY13 average CPO price estimate of RM2,500/tonne. As for stocks pick, we like Sime Darby and Boustead.
Wilmar too appears attractive underpinned by sustained recovery in the
Oilseeds & Grains segment and earnings accretion from the aggressive expansion in sugar and flour in the past two years.
IFAR’s share price hasdeclined as much as 21% in the past three months, which we think is related to the devaluation of Rupiah. The stock is now trading at 8.7x forward PER, close to the historical low of 8.3x.
ASEAN Agri-Commodities August palm oil inventory continued to stay low -ALERT
JP Morgan, 10 Sep 2013
Malaysia August palm oil inventory stayed low at 1.67 million MT: MPOB just released August palm oil inventory at 1.67 million MT (flat M/M), against Street estimate of 1.71 million MT and an earlier survey figure of 1.73 million MT reported by Reuters last week.
Stock-to-export ratio fell to a low of 1.1x (historical mean: 1.3x), a level last seen in June 2012 before inventory started to rise significantly that caused the CPO price correction in 4Q2012. This is despite having entered the seasonally higher production period in the year where production rose further in August.
We believe this inventory print will continue to be positive in supporting CPO price, with added strength from the roll-out of B10 biodiesel in Indonesia adding to demand.
Production picked up in line with seasonality but further normalization underway: Production rose a further 3.6% M/M (+4.3% Y/Y) to 1.74 million MT, in line with seasonality trends. This followed from an 18% M/M increase in July. YTD production growth continued to see a gradual normalization trend at +5.7% Y/Y. That inventory continued to maintain in a low, comfortable level was a strong reflection of the underlying demand as evident from both the exports and domestic consumption trend.
Exports rose 7.4%, domestic consumption also strong: Exports rose 7.4% M/M and 5.7% Y/Y, continuing the strength in July. YTD, exports were up 7.4%. Domestic consumption also stayed strong, up 25% Y/Y.
Macro datapoints also supportive of CPO price recovery: Soybean price saw a strong c.10% rally from its mid-Aug trough, triggered by dryness affecting major soybean producing regions in US Midwest.
Early signs of dryness in South America that could potentially impede soybean planting in Brazil this month have also raised some supply concerns further out. The recent B10 biodiesel push in Indonesia is also expected to drive near term CPO demand with current crude oil price making blending profitable even without subsidies. YTD CPO price is tracking our forecast and we maintain our 3Q/4Q13E forecast of M$2,350/M$2,400 and M$2,500 for 2014E.
Our thesis regarding a gradual recovery in CPO price in 2H2013 remains intact with potential upside risks if weather events were to disrupt the upcoming US or next year's South America's soybean crop.
Further strength in crude oil price may also encourage faster adoption of the B10 biodiesel programs in Indonesia and Malaysia. The sector is well positioned for a recovery, in our view. We therefore expect stocks that have underperformed but continued to deliver strong production growth or are expected to see meaningful earnings recovery in 2H13 to play catch-up. The near term biasness could therefore be tilted towards the Malaysian-listed names which have been the bigger underperformers across the region over the past 1 month.
KUALA LUMPUR — The prices of palm, the world’s most-used cooking oil, may slump to their lowest since 2009 by January as global supplies of edible oils expand and crude oil weakens, said Mr Dorab Mistry, Director at Godrej International.
Futures will probably retreat to RM2,000 (S$791) a tonne in Kuala Lumpur if Brazil and Argentina, the largest soya bean growers after the United States, harvest bigger crops and Brent crude drops below US$100 (S$125) a barrel, Mr Mistry told an industry conference in Mumbai yesterday. Prices will not fall below RM2,200 in the next few weeks and will trade from RM2,200 to RM2,400, he said.
Palm, used in everything from candy to detergents, is poised for a third annual loss, the worst run since at least 1996, according to data compiled by Bloomberg. Lower cooking oil prices may help extend a drop in global food costs measured by the United Nations to the lowest in more than a year. World palm stockpiles will surge 17 per cent to a record 9.2 million tonnes by the end of 2013-14 as demand expands 4.5 per cent, the least in 12 years, the US Department of Agriculture estimates.
“The fundamentals of the oil seed and vegetable oils complex are clearly bearish,” said Mr Mistry, who has traded vegetable oils for over 30 years. “We cannot expect a bull market in vegetable oil prices any time in 2013-14 unless we have adverse weather.”
Palm for delivery in December closed at a five-week low of RM2,300 on Bursa Malaysia Derivatives last Friday. Futures had the biggest monthly gain last month since December 2010 as crude rose to a two-year high, a weak ringgit boosted Malaysian exports and hot, dry weather hurt the US soya bean crop.
Stockpiles in Malaysia and Indonesia will begin to rise from this month and increase for the next several months, and palm will face more competition from products such as sunflower and soybean oils, said Mr Mistry. Bloomberg http://www.todayonline.com/business/palm...owest-2009
Greenpeace, Wilmar clash over palm oil supply chain
SINGAPORE — Greenpeace has singled out Wilmar International, the world’s biggest palm oil trader headquartered in Singapore, for not doing enough to ensure its supplies do not come from illegally-cleared forests in Indonesia which are home to Sumatran tigers and other wildlife.
The environmental campaigning group pointed this out in a report it released yesterday calling for the palm oil industry to stop destroying tiger habitats.
Greenpeace’s allegations against Wilmar and its identification of several multinational trade partners — including Arnott’s Biscuits, Colgate-Palmolive and Mondelez International (formerly known as Kraft Foods) — drew a robust response from the agri-business giant.
... http://www.todayonline.com/singapore/gre...pply-chain
(23-10-2013, 10:30 AM)CityFarmer Wrote: Wilmar just an easy and obvious target, IMO...
Greenpeace, Wilmar clash over palm oil supply chain
SINGAPORE — Greenpeace has singled out Wilmar International, the world’s biggest palm oil trader headquartered in Singapore, for not doing enough to ensure its supplies do not come from illegally-cleared forests in Indonesia which are home to Sumatran tigers and other wildlife.
The environmental campaigning group pointed this out in a report it released yesterday calling for the palm oil industry to stop destroying tiger habitats.
Greenpeace’s allegations against Wilmar and its identification of several multinational trade partners — including Arnott’s Biscuits, Colgate-Palmolive and Mondelez International (formerly known as Kraft Foods) — drew a robust response from the agri-business giant.
... http://www.todayonline.com/singapore/gre...pply-chain
Obviously, no effect on share price, it has been rallied a fair bit recently, perhaps anticipating a a favourable Q3 earnings.
23-10-2013, 12:32 PM (This post was last modified: 23-10-2013, 01:10 PM by Clement.)
(23-10-2013, 11:15 AM)valuebuddies Wrote:
(23-10-2013, 10:30 AM)CityFarmer Wrote: Wilmar just an easy and obvious target, IMO...
Greenpeace, Wilmar clash over palm oil supply chain
SINGAPORE — Greenpeace has singled out Wilmar International, the world’s biggest palm oil trader headquartered in Singapore, for not doing enough to ensure its supplies do not come from illegally-cleared forests in Indonesia which are home to Sumatran tigers and other wildlife.
The environmental campaigning group pointed this out in a report it released yesterday calling for the palm oil industry to stop destroying tiger habitats.
Greenpeace’s allegations against Wilmar and its identification of several multinational trade partners — including Arnott’s Biscuits, Colgate-Palmolive and Mondelez International (formerly known as Kraft Foods) — drew a robust response from the agri-business giant.
... http://www.todayonline.com/singapore/gre...pply-chain
Obviously, no effect on share price, it has been rallied a fair bit recently, perhaps anticipating a a favourable Q3 earnings.
Wilmar can be seen as a potential beneficiary of the Indonesian bio diesel regulations. If the bio diesel takes off, there might be more demand for Wilmar's processing and refining business, which it has the capacity to meet. However, at these levels, the margin of safety is not very nice.
CPO has just broken the 2480 resistance, and Wilmar's results is due the next couple of days. If the results is positive with CPO price continue going higher, we could probably see Wilmar's price testing the last high at 3.80.
Lower CPO does affect Wilmar's feedstock prices, but also affect the valuation of the biological assets. Unlike GAR, Wilmar is less correlated to the changes of the CPO because of this reason. But historically, when it is a boom year for CPO, it is also a boom year for Wilmar.
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