Maybank Kim Eng upgraded palm oil company Wilmar
International Ltd to 'buy' from 'sell' and raised its
target price to S$4.65 from S$2.75, on expectations its earnings
will improve along with a recovery in its biggest market China.
By 0230 GMT, Wilmar shares were flat at S$3.64, having risen
nearly 9 percent since the start of the year, compared with the
Straits Times Index's 1.2 percent gains.
Expectations of low crude palm oil (CPO) prices in 2013 will
benefit Wilmar, as it is a net buyer of CPO, although it owns
some plantations, Maybank said, adding that lower feedstock cost
will likely improve margins of its refining, trading and
An improvement in China, which accounts for almost 50
percent of Wilmar's revenue, will boost the palm oil company and
its plans to cut back capital expenditure will strengthen its
"With China's soybean imports hitting a surprising high
towards the end of 2012, we believe earnings surprises lie
ahead," said Maybank in a report.
1031 (0231 GMT)