What you need to know about Wilmar's second attempt at China listing

It will be through the issuance of new shares with a minimum free float of 10%.

DBS Group Research said agribusiness giant Wilmar is currently exploring separate listing of its China operations through the issuance of new shares with a minimum free float of 10%.

"We understand the group is currently restructuring its China subsidiaries with the aim of eventually establishing a China holding company for this purpose. A prospectus for the proposed separate listing would not be available until 18 months from now; and the group has appointed a Chinese bank to undertake the planned corporate action," the brokerage firm said.

Wimar had attempted to list its China operations in China in 2009 but decided to abandon the plan on valuation grounds.

"The group is optimistic it would be valued higher than its current multiple on a consolidated basis. China businesses are the fastest growing within the group now that it has established its rice and flour businesses, which still have significant upside potential given the huge market size of 120m MT and 80m MT p.a. respectively," DBS Group Research said.

In 1Q17, the group’s China pretax contribution amounted to around 50%, thanks to good soybean crush margins.

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