Wilmar International

wilmar looks cheap at only 10 times earnings

I v simple man - I look at divisional breakdown and saw loss making - I run for my life.

Overall this conglomerate is too confusing for me. Nevermind about their attempts to explain their exceptional problems. Its darling days seem to be firmly behind it so investors should focus energy and resources on simpler and more focus business.

I don't invest to hope I can consistently understand confusing explanations and guidance from companies.

Odd Lots Vested
GG

(09-05-2014, 07:40 AM)LLI Wrote: Hi greengiraffe,

why do you say they cant get their sugar business in order? I am abit confused by that, sugar business seem fine to me.

(08-05-2014, 08:12 PM)greengiraffe Wrote: confusing conglomerate... they can't get their sugar business in order and still bidding for another tough business in Goodman Fielder...

http://infopub.sgx.com/FileOpen/Wilmar_1...eID=296038

Here's Wilmar chart link.

http://finance.yahoo.com/echarts?s=F34.S...I;range=5y

Glad you run for your life. We can't just invest because is cheap.
Tell us what may/has change ?

I agreed on the confusing part. Even the chairman said many called it a blackbox. Lol.
But sugar business is seasonal, so it is always loss making till the last quarter as they harvest once a year.
But most of its investment are very long term time frame. Their business in Africa can be very interesting in the future.

(09-05-2014, 09:57 PM)greengiraffe Wrote: I v simple man - I look at divisional breakdown and saw loss making - I run for my life.

Overall this conglomerate is too confusing for me. Nevermind about their attempts to explain their exceptional problems. Its darling days seem to be firmly behind it so investors should focus energy and resources on simpler and more focus business.

I don't invest to hope I can consistently understand confusing explanations and guidance from companies.

Odd Lots Vested
GG

(09-05-2014, 07:40 AM)LLI Wrote: Hi greengiraffe,

why do you say they cant get their sugar business in order? I am abit confused by that, sugar business seem fine to me.

(08-05-2014, 08:12 PM)greengiraffe Wrote: confusing conglomerate... they can't get their sugar business in order and still bidding for another tough business in Goodman Fielder...

http://infopub.sgx.com/FileOpen/Wilmar_1...eID=296038

Too many drivers for so many divisions... how to sort things out for confused investors let alone analysts that got literally most of their forecasts wrong...

PUBLISHED MAY 10, 2014
Wilmar sees better China soya bean crushing margins
BYANDREA SOH
sandrea@sph.com.sg @AndreaSohBT

EVEN as its shares closed 3.9 per cent lower at $3.21 yesterday, in response to a lacklustre set of first-quarter results, Wilmar International said the soya bean processing situation in China will not stay as severe.
"(The) first quarter of 2014 is the worst I've ever experienced (since Wilmar got into the crushing business in 1995)," said CEO Kuok Khoon Hong at its results briefing yesterday. "Second quarter should not be as bad."
Negative soya bean crush margins in China led to the group's earnings tumbling 48.7 per cent to US$161.8 million, missing analysts' expectations. Its oilseeds and grains division recorded a pre-tax loss of US$57.4 million, compared with a profit of US$47.2 million a year ago.
Shares in the world's largest palm oil processor fell to as low as $3.15 yesterday. With 28.7 million shares traded, it was the fifth most actively traded stock.
Financial traders - who since a few years ago have been importing soya beans and metals such as copper as a roundabout way to secure cheap financing - had imported more soya beans as a result of good crush margins in Q4 last year, explained Mr Kuok.
China's soya bean imports jumped a record 33.5 per cent in the first quarter, Reuters earlier reported.
The excess supply of soya beans was compounded by reduced demand because of the bird flu and a slower Chinese economy - a reversal from Q4 last year when shipments were delayed and consumption was high.
The resultant collapse in crush margins has caused some of these financial traders to have problems in obtaining letters of credit from banks, said Mr Kuok.
The poor Q1 results led at least two brokerages, OCBC and CIMB, to downgrade their call on Wilmar to "hold".
Maybank Kim Eng analyst Wei Bin, who lowered his target price from $4.29 to $3.94 but maintained a "buy" call, was slightly more optimistic. "We maintain that Wilmar stands to benefit from a structural recovery in soya bean crushing margin and sugar price," he said. "Current valuation looks cheap."
Wilmar, which is making a takeover offer with Hong Kong-listed First Pacific for Australia's largest baking firm, Goodman Fielder, also said it may not continue with the bid if news reports of the firm selling its New Zealand dairy business are true.

If following tycoon is your way of investing, Robert Kuok is the biggest in ASEAN. Much bigger than either Thai one or Ong .

Ha... picking the real Godfather is an art not a science.

Robert Kuok is up there with Superman KS Li. Depending on which part you are riding.

If I remember correctly Robert Kuok has good track record of delisting before big things happened - Shangarila Hotels (now under Shangarila Asia), Pac Carriers (now under Maybulk), Allgreen. Of course the reverse is true - when he sells we have to think carefully about investing in his spinoffs.

Real Godfathers are far and few to come by. Most of the time, they are businessman focus on creating real value for their shareholders instead of focusing their attention on share price. However in the process of creating value for their shareholders, they are also building track record and enhance the share prices of the companies through progressively re-rating of the valuations.

Wee Cho Yaw is one good example even though he is a proven shrewed career banker. Thai Charoen has made good $ via his leverage buyout of F&N and unlocked and remains on track of unlocking value for faithful minorities so far. FF Wong is another one of my idol after he created so much value for his Boustead shareholders since turning around the company in 2002.

Buddies are welcome to add on to the real Godfather lists...

(10-05-2014, 06:52 PM)freedom Wrote: If following tycoon is your way of investing, Robert Kuok is the biggest in ASEAN. Much bigger than either Thai one or Ong .

Salim backed First Pac + Wilmar = proven wrong term investors... time will heal all wounds...

http://infopub.sgx.com/FileOpen/Update_o...eID=297471

Goodman Fielder mulls sweetener
RICHARD GLUYAS THE AUSTRALIAN MAY 16, 2014 12:00AM


THE joint Asian bid for Goodman Fielder is moving closer to resolution, with the company’s shares placed in a trading halt yesterday as the board considered a sweetened, 70c-a-share offer that two major shareholders are understood to have accepted for part of their holdings.

Singapore oils trader Wilmar International and Hong Kong investment group First Pacific lifted their bid by 5c a share, valuing Goodman at almost $1.4 billion — enough to extract acceptances for 5 per cent holdings from ­Perpetual and Ellerston Capital, which respectively own 12.2 per cent and 13 per cent of the target.

Wilmar already owns 10.1 per cent of Goodman, enabling the bidders to lift their combined stake to 20 per cent.

The bid, however, remains conditional on the approval of the Goodman board, as well as the Foreign Investment Review Board’s backing for Wilmar and First Pacific to lift their holding above 15 per cent.

Reports yesterday said it was also conditional on the sale by Perpetual and Ellerston of about half their stakes.

Goodman asked for the trading halt pending an announcement about a potential change of control.

Trading is scheduled to resume by Monday at the latest, with the stock last fetching 67.5c.

Last month, Goodman became the latest food industry takeover target, with Wilmar and First Pacific lodging a non-binding, conditional proposal at 65c a share, capitalising the company at $1.27bn.

The move came soon after a veiled warning by Goodman chief Chris Delany at The Australian’s Global Food Forum, when he noted that “more and more and more of the ownership of the food manufacturing assets have moved into multinational hands’’.

He said that while he had spent a good part of his career at multinationals “so I don’t think that’s a bad thing’’, he noted one of the outcomes was “more and more ... ­research and development and technical functions have moved offshore’’.

The Goodman board has previously opposed the overtures, saying the suitors were being “opportunistic” and undervaluing the company.

However, it signalled its willingness to negotiate by appointing Credit Suisse as its adviser, with UBS and Bank of America Merrill Lynch acting for the bidders.

The April 28 proposal came only weeks after Goodman’s fourth earnings downgrade since 2011.

After $700 million in write-offs over the past three years, the company flagged further possible writedowns, sending Goodman’s shares plummeting as much as 20 per cent to a 19-month low of 47.5c.

Goodman has long been seen as a likely takeover target, more so now given the strategic value of Australian food businesses as the Asian middle class continues to grow.

The $500m-plus takeover of Warrnambool Cheese & Butter by Canadian dairy giant Saputo was the most recent example.

Wilmar and First Pacific have been turning up the pressure on the Goodman board by threatening to walk away if the target proceeds with its plan to sell all or part of its New Zealand dairy business.

The bidders said their proposal specified there were to be no material asset sales.

This followed Goodman’s announcement of a strategic review of the NZ dairy business in February, after expressions of interest.

We had this discussion 6 months back so can't actually say the palm processing issues weren't expected

Detailed link here, summary below
http://www.valuebuddies.com/thread-257-p...l#pid65764

PS all the best to those who bought kuok's PACC

(11-11-2013, 01:56 PM)Clement Wrote:

(11-11-2013, 12:32 PM)specuvestor Wrote: Yes quite a number of listed Indonesia plantation players had been using Wilmar as mill. What you are saying is the accounting treatment on how they charge the "value add". Just look at their FFB tonnage and their CPO tonnage vs the 20% yield. Hence margins and volume for milling should be coming off if what these other players are saying is true.

Hi specuvestor,

I see where you are coming from. I was confused as you mentioned the export tax earlier. The export tax difference is between refined palm oil products and cpo. FFB cannot really be exported as they need to be processed within 24 hours of harvesting.

Regardless, i agree that Wilmar will most likely be purchasing more CPO directly from planters instead of buying ffb and milling them.