- Wilmar (SGX:F34)’s 4Q24 earnings disappointed. However, we believe this is the bottom. We increase target price to S$4.05 to reflect higher earnings. Upgrade to BUY.
- Margins are stabilising as input costs fall and the Group gains scale advantages. Volumes across all business segments are improving as demand recovers and crush margins strengthens.
- - Read this at SGinvestors.io -
China’s recovery prospects improving
- Wilmar's Food Product segment volumes increased +11% y-o-y (vs. +3% 4Q23), reflecting stronger Chinese demand.
- - Read this at SGinvestors.io -
- Also, crush margins improved due to soybean prices declining -4.4% q-o-q in 4Q23. Management expects this to continue due to record soybean production in Brazil.
- Trump policies aimed at reducing US biofuel mandates may further cut demand for soybeans - driving prices lower. This is positive for Chinese crush margins, according to Management.
- While the US-China trade war is a key risk, Wilmar’s domestic consumption-oriented food staples should provide shielding, in our view.
Indonesian court case is a known-unknown risk
- Read more at SGinvestors.io.
