Meanwhile, DBS analyst William Simadiputra says it does not anticipate any catalysts that would move the stock significantly higher in the near term.
To recap, Wilmar reported a 0.4% y-o-y rise in revenue to US$11.1 billion ($15.1 billion) in 3Q17, supported by higher sales from Oilseeds & Grains.
See: Steady performance for Wilmar but palm operations a drag on profitability
Net profit fell 5.7% y-o-y to US$370 million while core net profit decreased 15.9% to US$323.7 million in 3Q17.
The good performance in Oilseeds & Grains and strong contributions from associates were offset by weaker results in the Tropical Oils and Sugar businesses.
Oilseeds & Grains registered higher pre-tax profit of US$253.7 million in 3Q17, driven by higher crush volume and good crush margins.
In the Tropical Oils segment, pre-tax profit in 3Q17 fell 51% y-o-y to US$83.1 million on lower processing margins.
As for the Sugar business, pre-tax profit declined 13% y-o-y to US$75.2 million due to timing effect from the new Australian Sugar marketing programme, in which certain proportion of sugar produced would only be sold in the subsequent quarters.
Looking ahead, Simadiputra expects Wilmar to see a stronger close for the year, on improving contributions from its Oilseeds and Grains segment due to positive crush margins and volumes, as evidenced in 3Q17.
OCBC analyst Low says possible IPO plans for its China operations may drive its share price closer to its potential listing date.
Wilmar is expected to file for IPO earliest in 1H19. “We note that in 9M17, the group’s China pretax contribution amounted to about 50%,” says Low.
As at 11.33am, shares in Wilmar are up 4 cents at $3.23 or 13.8 times FY18 earnings.
