Wilmar International (S$4.49) - Price control concern offers buying opportunity Wilmar’s share price slipped 8% yesterday partly on concerns over the potential negative impact of a new price control measure in China, we believe.
We think the sell-down is overdone and expect Wilmar to weather this new measure better than most of its peers as the group enjoys better economies of scale and has a strong record of buying input at competitive prices.
Furthermore, Wilmar may be able to offset weaker profit margins through higher sales volume, further strengthening its market position in China. There is no change to our earnings forecasts, target price of S$5.70 (25.8x CY08 P/E) or Outperform rating.
Potential share-price catalysts include the removal of price restrictions in China and possible earnings-accretive M&As.
Quick Takes
- SIA Engineering (S$4.35) - Secures S$116m maintenance contract
- Singapore Press Holdings (S$4.37) - In an enviable position
- Straits Asia Resources (S$2.93) - FY08 pricing largely capped
- Non-Oil Domestic Trade - Lousy end to the year News of the Day
- Bush, Bernanke back economic rescue plan
- Hotels, eateries top profit growth in 2007
- Technics unit gets $22m contract
- Hong Leong Asia expects 20% annual revenue growth
- Three Allco Reit properties gain $121m in value
- A-Reit's portfolio hit record occupancy of 99% at end-2007
- AIS sees 1m new subscribers despite competition
No comments:
Post a Comment