DJ: Wilmar

DJ MARKET TALK: Wilmar Off 0.9%; Property Concerns Seem Priced In
12/30/2010 10:54:00 AM

0254 GMT [Dow Jones] Selling in Wilmar (F34.SG) could be tapering off judging from its modest decline following its latest move to venture more deeply into property development. The stock is off 0.9% at S$5.64 in light volume, after losing 3.9% since December 21, when it first unveiled its entry into China's property market with Kerry Properties (0683.HK) and Shangri-la Asia (0069.HK), and down 17.3% from the November S$6.88 peak. Support is at this month's S$5.56 low. Any sustained recovery will, however, depend on whether 4Q10 margins recover from their 3Q10 weakness; results will be known around February. Wilmar's latest move with both partners involves bidding for six sites for residential and commercial use in Liaoning's Yingkou City, where they already have 3 land parcels. "Operational and execution risks from the property ventures are likely to be minimal due to the strength of Wilmar's joint venture partners," says AmResearch; has a Buy call with a S$7.60 target. (frankie.ho@dowjones.com)