20 May 2014

Company Update
WILMAR INTL | HOLD

Asia Pacific Equity Research



Singapore | Food Products

Improves offer to A$0.70/share
Wilmar International Limited (WIL), together with 50-50 JV partner
First Pacific Company Limited (FPCL), has improved its offer to acquire
the entire issued share capital of Goodman Fielder (listed on ASX and
NZX); this up to A$0.70/share after having its initial offer of A$0.65
rejected by Goodmans board as being too low and materially
undervalues the company.
Board said to have accepted improved offer
However, the board of Goodman has just announced that it will
unanimously recommend shareholders to vote in favour of the
improved offer, which will cost the WIL-FPCL JV some A$1.37b (as
opposed to A$1.3b previously). Separately, with the new offer being
some 33% over Goodmans A$0.525 closing price on 23 Apr, the JV
also said it would not be increasing the offer further in the absence of
a competing proposal. In view of the latest development, Goodman
will provide the JV with non-exclusive access to due diligence of the
company over a short and focused period of approximately four weeks
Move will expand WILs downstream capabilities
According to management, the deal represents an opportunity for the
group to create a leading Asia-Pacific agricultural and consumer
staples company. We think that the move makes sense as the range
of products will advance WILs strategy of broadening its product
range to take advantage of its extensive distribution network,
especially in China. We also believe that WIL should be able to
capitalize on its brand recognition in China to market these Made in
NZ food products as safer alternatives to locally-made brands.
May take some time to see benefits
Having said that, we note that it is not a done deal and even if the
deal does go through, we believe that it may still take a while for the
JV to reap the full benefits; this as it will take time to adapt the
products to the Chinese market as well as create consumer
awareness. Hence we are not making any changes to our FY14 and
FY15 estimates for now. We also maintain our HOLD rating with an
unchanged S$3.36 fair value (12.5x blended FY14/FY15F EPS).






IMPROVES OFFER FOR GOODMAN
FIELDER
Improves offer to A$0.70
Gets access for due diligence
Positive but no near-term benefits
MARKET CAP: USD 16.5B AVG DAILY TURNOVER: USD 18M

HOLD (maintain)
Fair value

S$3.36
add: 12m dividend forecast S$0.06
versus: Current price

S$3.23
12m total return forecast

6%

Analysts

Carey Wong (Lead) +65 6531 9808
carey@ocbc-research.com
Wong Teck Ching (Andy) +65 6531 9817
andywong@ocbc-research.com

Key information

Market cap. (m) S$20,669 /

USD16,523
Avg daily turnover (m) S$23 /

USD18
Avg daily vol. (m) 7.0
52-wk range (S$) 3.02 - 3.65
Free float (%) 36.1
Shares o/s. (m) 6,399.1
Exchange SGX
BBRG ticker WIL SP
Reuters ticker WLIL.SI
ISIN code F34
GICS Sector Consumer Staples
GICS Industry Food Products
Top shareholder
Wilmar - 40.6%

Relative total return 1m 3m 12m
Company (%) -5 -1 -2
STI-adjusted (%) -6 -8 0

Price performance chart


Sources: Bloomberg, OIR estimates

Industry-relative metrics


Note: Industry universe defined as companies under identical GICS classification
listed on the same exchange.
Sources: Bloomberg, OIR estimates

Key financial highlights

Year Ended 31 Dec (US$m) FY12 FY13 FY14F FY15F
Revenue 45,463.4 44,085.0 46,124.0 50,251.2
EBITDA 1,976.4 1,942.1 1,861.2 2,236.3
Operating Profit 1,462.6 1,325.0 1,153.1 1,507.5
Net Profit 1,255.5 1,318.9 1,152.2 1,537.6
EPS (US cents) 19.6 20.6 18.0 24.0
Cons. EPS (US cents) na na 20.6 23.6
Price/NTA (x) 1.6 1.5 1.4 1.3
EV/EBITDA (x) 15.1 15.8 16.0 12.8
Net Gearing (%) 95.4 96.4 85.7 72.8
ROIC (%) 3.4 3.2 2.9 3.9










Please refer to important disclosures at the back of this document. MCI (P) 004/06/2013








































































OCBC Investment Research
Singapore Equities


Company financial highlights


Company financial highlights
Income statement
Year Ended 31 Dec (US$m) FY12 FY13 FY14F FY15F
Revenue 45,463.4 44,085.0 46,124.0 50,251.2
EBITDA 1,976.4 1,942.1 1,861.2 2,236.3
Depreciation & amortisation -542.7 -608.5 -708.1 -728.8
Operating Profit 1,462.6 1,325.0 1,153.1 1,507.5
Net interest -177.7 -18.4 -203.1 -185.8
Associates 123.1 103.8 150.0 180.0
Exceptionals 0.0 0.0 0.0 0.0
Pre-tax profit 1,654.6 1,775.5 1,500.0 2,001.8
Tax -334.2 -384.7 -285.0 -380.3
Net Profit 1,255.5 1,318.9 1,152.2 1,537.6
Balance sheet
As of 31 Dec (US$m) FY12 FY13 FY14F FY15F
Cash 8,562.2 11,735.4 10,287.0 9,393.0
Other Current Assets 15,257.3 16,106.1 15,931.6 17,046.0
Fixed Assets 8,923.7 9,337.2 8,629.1 7,900.3
Other long term assets 9,176.9 9,453.1 9,453.1 9,453.1
Total Assets 41,920.1 46,631.8 44,300.8 43,792.3
Current Liabilities less Debt 3,673.0 3,799.7 3,030.1 3,174.5
Debt 22,245.3 26,195.6 23,916.2 21,847.8
Other Long Term Liabilities 806.6 749.7 499.8 623.8
Shareholders Equity 14,345.9 15,004.8 15,909.9 17,117.7
Total Equity and Liabilities 41,920.1 46,631.8 44,300.8 43,792.3
Cash flow statement
Year Ended 31 Dec (US$m) FY12 FY13 FY14F FY15F
Profit Before Tax 2,200.7 2,449.0 2,911.2 3,416.3
Working Capital Changes -580.9 -288.0 -436.6 -469.9
Net Cash from Operations 1,067.7 1,613.6 2,521.2 2,636.7
Capex -1,735.2 -1,376.3 -1,000.0 -1,000.0
Investing Cash flow -1,857.6 -1,432.1 -1,178.2 -1,215.1
Change in Equity 13.3 56.6 0.0 0.0
Net Debt Change 1,989.7 861.1 -2,279.4 -2,068.4
Financing Cash Flow 1,038.7 527.3 -2,791.5 -2,315.6
Net Cash flow 248.8 708.8 -1,448.5 -894.0
Ending Cash Balance 8,562.2 11,735.4 10,287.0 9,393.0
Key rates & ratios FY12 FY13 FY14F FY15F
EPS (US cents) 19.6 20.6 18.0 24.0
Fully Diluted EPS (US cents) 19.6 20.6 18.0 24.0
PER (x) 12.9 12.2 14.0 10.5
Price/NTA (x) 1.6 1.5 1.4 1.3
EV/EBITDA (x) 15.1 15.8 16.0 12.8
Dividend Yield (%) 1.5 2.5 2.5 2.5
ROIC (%) 3.4 3.2 2.9 3.9
ROE (%) 8.8 8.8 7.2 9.0
Net Gearing (%) 95.4 96.4 85.7 72.8
PE to Growth (x) -0.6 2.4 -1.1 0.3
Sources: Company, OIR forecasts

























































Important disclosures


OCBC Investment Research
Singapore Equities


SHAREHOLDING DECLARATION:


The analyst/analysts who wrote this report holds/hold NIL shares in the above security.



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