UOBKayhian on 10 Apr 2013
Wilmar will gradually reduce its dependence on China, UOB KayHian says, noting the mainland's share of revenue has dropped to 47% in 2012 from 2009's 55%.
"While Southeast Asia (especially Indonesia and Vietnam) was the main driver in the last three years, India, Eastern Europe and Africa will drive revenue going forward."
It notes Wilmar plans expansion in Ghana and Nigeria as fast-emerging markets. It notes capex ahead will be focused on new markets, especially Africa, to grow the upstream palm operations, palm value chain and consumer packs.
The house expects the investment in African upstream palm operations to start contributing in three years. It rates the stock Buy with $3.80 target. The stock is down 0.9% at $3.32.
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