Period     1Q13 for Wilmar International Ltd.

Actual vs. Expectations      Wilmar’s 1Q13 core net profit* of USD314m came in within consensus and our expectations. It made up 23% of the consensus’ FY12 forecast of USD1.37b and 24% of our forecast of USD1.32b.

Dividends     As expected, no dividend was announced.

Key Results Highlights     YoY, Wilmar’s 1Q13 core net profit surged 53% to USD314m caused mainly by the turnaround in its Oilseeds And Grains’s (OAG) division, which registered PBT of USD47m. Note that OAG division incurred Loss Before Tax of USD53m last year. We gather that Wilmar China crushing margin remained positive due to lower cost of imported beans and higher local product prices.

QoQ, Wilmar’s 1Q13 core net profit declined 22% to USD314m. We gather that Plantation And Palm Oil Mills (PPO) division PBT slipped 27% QoQ to USD72m in line with seasonally low FFB production in 1Q13.

Outlook      We believe that PPB 1Q13 result (due end-May) should improve significantly YoY in line with higher earnings contribution from Wilmar. In FY12, contribution from Wilmar makes up 76% of the Group’s PBT.

Change to Forecasts      Maintain FY13E-FY14E RM851m-RM862m.

Rating      Maintain OUTPERFORM

Valuation      Maintaining our TP of RM15.00 based on a Fwd. PER of 20.9x on its FY13E EPS of 71.8sen.

Risks     Below expectation margins for the OAG division.

Source: Kenanga