Is Wilmar at $3.94 a good BUY?

 

Wilmar is one of the largest companies in Singapore with a market capitalisation of $25B. With a record FY22 net profit of US$2.4B and upcoming increased dividend payout of 11c, its price however has been under pressure these days. Mr Kuok, the Chairman and CEO of Wilmar even had to support its price this week, as the stock succumbed to $3.87 from heavy selling. 

From the Covid correction in Mar 2020, its price has rebounded from $3 to $5.3 in Mar 2021, only to retrace till its current $3.94 price. With a dividend of 17c, this translates to a 4.3% yield (slightly higher than current SSB, T-Bills and Fixed Deposits).

The price weakness could be due to management expectations of a challenging FY23 with plantation profits under pressure but mitigated by China reopening from zero-Covid policy.

Taking a longer term view on price: Wilmar used to be $6+ in 2010, before consolidating to form a solid base of around $3 in the years of 2013-2019.

Would these base years of company restructuring into a solid commodity company translate to a stronger price in the near future?

Please feel free to leave your comments below

*Disclosure: I am currently vested in Wilmar