Period   3Q13 for Wilmar International Ltd.

Actual vs. Expectations   Wilmar’s 9M13 core net profit* of USD950m is in line with consensus expectations, making-up 73% of both the consensus’ and our FY13 forecast of USD1.30b.

Dividends No dividend was announced as expected.

Key Results Highlights YoY, Wilmar’s 9M13 core net profit increased 24% to USD950m due to the turnaround in its Oilseeds and Grains’ (OAG) division, which registered PBT of USD116m against Loss Before Tax of USD32m last year. Note that Wilmar China’s crush margin was strong in 3Q13 due to delayed arrival of soybeans from South America and shortage of alternative meals.

QoQ, Wilmar’s 3Q13 core net profit surged 59% to USD391m as OAG division PBT jumped 252% to USD54m. Consumer products PBT also jumped 95% to RM58m due to volume surge of 14% to 1.50m mt.

Outlook  The stellar performance from OAG division and the good growth in consumer products segment are positive to Wilmar.

Change to Forecasts Maintain FY13E-FY14E earnings of RM851m-RM862m.

Rating Maintain OUTPERFORM   PPB is poised to benefit from Wilmar’s earnings recovery as we estimate that more than 60% of PPB earnings are derived from Wilmar.

Valuation  Maintain our TP of RM15.20 based on a Fwd.

PER of 20.9x on its FY14E EPS of 72.7 sen.

Risks to Our Call Lower than expected margins for Wilmar’s OAG division.

Source: Kenanga