Monday 24 February 2014

Wilmar International

UOBKayhian on 24 Feb 2014

FY14F PE (x): 11.3
FY15F PE (x): 9.8

Positive palm oil outlook on growing Indonesian biodiesel demand. Indonesia’s
biodiesel demand will climb to 3.5m tonnes in 2014 (exclude demand from PLN) vs
2013’s 800,000-1m tonnes. An increase in Indonesia’s biodiesel usage coupled with
rising domestic consumption of cooking oil will absorb the potential increase in
Indonesia’s palm oil production in 2014. For 2014, Wilmar is expecting a 10% increase
in FFB production from its low base in 2013. But Indonesian palm oil production is
unlikely to see a significant increase because of the dry weather. Maintain BUY and
target price of S$4.20, based on sum-of-the-parts method, implying a blended 14.3x
2014F PE.

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