Wilmar eyes restructuring of its subsidiaries in China

It plans to establish a China holding company.

Wilmar is on track to restructure its China subsidiaries, DBS Group Research said.

Analyst William Simadiputra said the aim of the restructuring is eventually establishing a China holding company.

"Prospectus for the proposed separate listing should be ready in FY19 at the earliest," the analyst said, adding that a possible initial public offering this could drive its share price closer to its potential listing date.

Simadiputra said this could be a catalyst for the group, albeit at a longer term.

"We do not anticipate any catalysts that would move the stock significantly higher in the near term. We believe the sequential earnings recovery in the past three quarters has already been priced in," he said.

He furthered, "In the longer term, with a greater presence in India, and gradual penetration of well-established brands – including Goodman Fielder – in China, Wilmar’s FY16-19F earnings are expected to expand at a around 8% compound annual growth rate.