SINGAPORE - Stay up to date on market chatter with our picks of the latest broker research reports, compiled by The Straits Times Money Desk.
Wilmar's core net profit for the first nine months of 2014 (9M14) was broadly in line with our forecast, at 74 per cent of our full-year projection and 71 per cent of consensus numbers. This marks its best quarter since the third quarter of 2011 (3Q11), with 3Q14 core earnings beating 1H by 14%.
The oilseeds division continued its strong earnings recovery but this was partially offset by weaker refining margins due to excess refining capacity in Indonesia. In our view, the share price is well supported but lacks re-rating catalysts due to a glut in the refining and crushing industry.
Maintain HOLD with an unchanged target price of $3.38
Broker: Maybank Kim Eng
3Q14 profit of $4.2 million, up 68 per cent year-on-year (YoY) and 17 per cent quarter-in-quarter (QoQ), exceeded our forecast of $3.6 million by 15 per cent. The positive surprise was in a 7-percentage point YoY and 2.1-percentage point QoQ rise in gross margin to 25.6 per cent versus our 23 per cent forecast.
Maintain BUY with target price raised to 65 cents from 52 cents.
3. Vard Holdings
In line with its profit warning, 3Q14 PATMI (profit after tax and minority interests) was a loss of 37 million Norwegian kroners as Brazil's losses widened and some European projects suffered cost overruns.
We expect a breakeven performance from Brazil next year and a small recovery back to FY13 levels. We believe valuations are still high relative to peers and consensus forecasts are likely to fall.
Maintain SELL with a target price of 58 cents.