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Citi stays unchanged on Wilmar, sees upstream oil plantation to be less than 5% of group revenue

Douglas Toh
Douglas Toh • 2 min read
Citi stays unchanged on Wilmar, sees upstream oil plantation to be less than 5% of group revenue
While these three companies have since been acquitted by Indonesia’s public prosecutor, there is an ongoing appeal by the attorney general’s office. Photo: Wilmar
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Following the placement of an IDR11.9 trillion ($930 million) security deposit over “corrupt actions” in 2021, Citi Research (Citi) analyst Gan Huan Wen has kept his “neutral” call on Wilmar Internationalat a target price (TP) of $3.25.

The sum, notes Gan, is equivalent to around 54% of Wilmar’s FY2025 net profit and about 10% of the group’s US$7.1 billion ($9.14 billion) cash.

He writes: “We estimate Wilmar’s Indonesia’s upstream oil palm plantation business makes up less than 5% of total group revenue.”

On the ongoing case, he points to an article by Indonesian online publication, Kompass, which highlights that legal proceedings involving Indonesian prosecutors and Wilmar and other Indonesian palm oil companies, Permata Hijau Group and Musim Mas Group have been carried out.

While these three companies have since been acquitted by Indonesia’s public prosecutor, there is an ongoing appeal by the attorney general’s office.

On this, Gan notes that this development follows the case of PT Duta Palma Group, which caused the state to suffer losses of IDR78 trillion.

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Following this, the attorney general’s office is now investigating allegations of manipulation of palm oil plantations, with fines worth IDR300 trillion.

“We note that some of PT Duta Palma Group’s 222,000 hectare of oil palm land that was confiscated by the attorney general’s office was transferred earlier this year to Agrinas Palma Nusantara,” adds Gan.

As at 4.19 pm, shares in Wilmar are trading two cents lower or 0.68% down at $2.91.

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