In a report released on August 12, Wee Kuang Tay from CGS-CIMB reiterated a Sell rating on Wilmar International, with a price target of S$2.70.
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Wee Kuang Tay’s rating is based on several factors impacting Wilmar International’s financial performance and outlook. The company’s core net profit for the second quarter of 2025 showed a significant decline both quarter-on-quarter and year-on-year, primarily due to reduced margins in its Feed & Industrial Products segment. Despite expectations for improved earnings in the second half of 2025, challenges persist in the tropical oil business, particularly with palm oil refining margins in Indonesia.
Moreover, uncertainties in Indonesia, including land confiscation issues and ongoing investigations into alleged corruption related to palm oil export permits and rice mislabeling, pose significant risks to Wilmar’s operations. These factors contribute to a cautious outlook, prompting Wee Kuang Tay to maintain a Sell rating, with potential de-rating catalysts including unfavorable court rulings in Indonesia. However, there are upside risks such as stronger-than-expected consumption in China, which could enhance the profitability of Wilmar’s Food Products segment.
According to TipRanks, Kuang Tay is a 3-star analyst with an average return of 3.1% and a 51.61% success rate.