China contributed around 60% to the firm's pre-tax profits.
Wilmar International’s possible initial public offering (IPO) for A-share listing in its China operation could bolster its share price as it is expected to file for an IPO by H1 2019 at the earliest, DBS Equity Research said.
The bank noted that the firm’s China segment contributed to around 60% of the agribusiness’ pretax profits.
Meanwhile, OCBC Investment Research (OIR) thinks that Wilmar’s oilseeds crushing business benefited from the trade wars between US and China as it improved crush margins in the short term given the lover soybean prices.
Wilmar’s profit skyrocketed 436.6% to US$316.4m ($436.14m) in Q2 2018 from US$59m ($81.33m) in Q2 2018 buoyed by solid performance from the oilseeds and grains and tropical oils segments.
OIR thinks that the improvement could continue until Q3. However, they note that Q4’s outlook remains to be uncertain amidst the rising trade war woes.
“A prolonged dispute will have a negative impact on the crush margins due to lower plant utilisation,” the bank explained.
OIR added that sugar performance could also be pushed forward by H2 2018 due to the start of crushing season in June.
The gains from other segments were partially offset by lower commodity prices in both the tropical oils and sugar segments.
Do you know more about this story? Contact us anonymously through this link.