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Broker's Take: 'Buy' call maintained for Wilmar International

MAYBANK Kim Eng has maintained its "buy" call on Wilmar International as its top sector pick with a target price of S$4.04.

This comes after Wilmar posted a 49 per cent year-on-year jump in net profit for first quarter FY2015, spearheaded by strong soya-bean crushing margins, better associate contributions and a reversal from huge foreign-exchange losses last year.

Part of this was negated by Tropical Oils weakness.

"We expect crushing margins to remain decent in first half of 2015. Operating conditions for crude palm oil plantations and refining could remain difficult in the near term but we expect margins to improve as Indonesia implements its biodiesel policies.

"We believe Wilmar's integrated business can better withstand commodity-price volatility. It remains our top sector pick. We leave earnings per share and target price unchanged, at 15 times FY2015 price earnings, its 5-year average," Maybank Kim Eng said.

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