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Wilmar, a 14% higher target price
Current, target price 4.08, 4.65(+14%)
September 16th, 2021
1 minute read
Sales up
Costs flat
1 minute read
Sales up
- Sales climbed 6% in the first half to 29,534 million dollars which is above our forecast 27,869 million dollars.
- Average growth is 14% after a stronger second half last year.
- We predict average growth of 6% in the next 12 months to bring sales to 33,184 million dollars in the first half of 2022.
Costs flat
- The cash cost ratio was flat at -95% & profit was lower at 866 million dollars from higher non cash costs.
- The average cost ratio is also -95%.
- We use a slightly lower -94% costs to predict a 1,258 million dollars profit in the first half of 2022.
Cashflow negative on working capital
Balance sheet, higher leverage
Valuation, a 14% higher target price
- Cashflow was negative again -2,462 million dollars with investment of -1,069 million dollars, because of high negative working capital.
- Average cashflow is now negative -2,509 million dollars.
- We use lower -954 million dollars investment which with higher sales & margins & neutral working capital gives a positive 894 million dollars Cashflow in the first half of 2022.
Balance sheet, higher leverage
- Cash increased from 2,706 to 2,905 million dollars in the first half.
- Liabilities increased from 29,637 to 34,007 million dollars, so net cash worsened from -26,931 to -31,102 million dollars.
- With our forecast positive cashflow & a -724 million dollars equity payout, net cash will improve to -30,141 million dollars in 12 months time.
Valuation, a 14% higher target price
- Wilmar capital from the last six years worsened to -3,466 million dollars in the first half.
- At the current value 19,201 million dollars, based on forecasts, it’s at 0.34X assets with a 4% yield.
- Our cashflow forecast is 1,684 million dollars, which is an 11X valuation. At 13X gives a 14% higher target price of 4.65 Singapore dollars: