Daiwa cuts Wilmar’s (F34.SG) target price to $6.73 from $7.49, based on a lower 14.4x FY11 P/E vs 16.2x FY11 P/E previously, to reflect its concerns over the agribusiness group’s venture into the real estate business.

“We believe investors will see this as a strategic divergence from its core (business), will raise concerns that the company is running out of investment opportunities in its core business, and have investors questioning why Wilmar is being used for this project.”

But keeps its Outperform call as it thinks the surprise 3Q10 operating loss in Wilmar’s oilseed division is a one-off event; “we think that the subsequent quarter’s results will validate our view and cause investors to raise their expectations for the FY11 net profit.”

Shares are down 4.4% at $5.66.