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Wilmar kept at 'buy' by RHB on diversified portfolio and downstream exposure

PC Lee
PC Lee12/10/2018 12:28 PM GMT+08  • 3 min read
Wilmar kept at 'buy' by RHB on diversified portfolio and downstream exposure
SINGAPORE (Dec 10): RHB Research expects top pick Wilmar to continue to outperform its peers in the plantation sector in FY19F given its diversified portfolio and downstream exposure should enable the group to mitigate the fall in CPO prices.
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SINGAPORE (Dec 10): RHB Research expects top pick Wilmar to continue to outperform its peers in the plantation sector in FY19F given its diversified portfolio and downstream exposure should enable the group to mitigate the fall in CPO prices.

As Wilmar’s processing and merchandising capacity for palm oil is far larger than its plantation output, RHB believes the lower earnings from plantation will be mitigated by positive palm refining margins.

In addition, Wilmar is the largest biodiesel producer in Malaysia and Indonesia and rising biodiesel mandates could help to raise demand and bring higher margins to Wilmar’s tropical oil segment.

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