Wilmar (SGX: F34) share price on the brink

Investors of Wilmar (F34) must have that deja vu feeling. In October 2020, Wilmar (F34) share price suffered an explosive meltdown following the hugely successful listing of Yihai Kerry Arawana Holdings Co., Ltd (YKA) on the Shenzhen Stock Exchange ChiNext Board. Fast forward to 22 February 2021, Wilmar (F34) share price fell again following the release of a set of stellar financial result which saw the Group announcing a record total dividend of $0.13.

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The form of Wilmar (F34) share price is truly frustrating. We are talking about an organization which recorded a net profit of US$1.54 billion in FY2020. Amid the backdrop of COVID-19 pandemic, how many Singapore companies out there are able to achieve such impressive result (apart from the local banks)? In view of this, I would say that the form of Wilmar (F34) share price does not do justice to its business fundamentals.

Wilmar F34 share price

To put things into context, the trigger for the recent correction of Wilmar (F34) share price is quite different from that of October 2020. The collapse in October 2020 was largely attributed to the work of short-sellers. On 15 October, short selling activities on Wilmar share price surged to 10.5 million, nearly 10 times the daily average volume for this counter. This time round, the bearish form of Wilmar (F34) share price is largely due to the broad market sentiments.

Whilst it is too premature to claim that Wilmar (F34) share price will continue to spiral out of control like what it did in last year, the management is taking no chances. From 23 February, the management launched a series of shares buybacks, with a whopping 5 million shares being repurchased on 26 February.

During last year’s rout, the management also went on the offensive to defend Wilmar (F34) share price. Till date, a stunning 50.4 million shares had been repurchased from the market. This indicates that the management will fight to the very end to preserve Wilmar (F34) share price.

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. As of now, I am not vested in this counter. In view of the volatility of Wilmar (F34) share price, investors must exercise caution in trading this counter.

Wilmar (F34) share price now or never?

Being one of the world’s largest oil palm plantation owners, Wilmar (F34) share price has always shared a close link with the movements of crude palm oil (CPO) prices. Based on data extracted from MPOB, the current CPO price of RM4013 is at a decade record high. Profit for the Plantation and Sugar Milling tripled during the period, from US$62.2 million in 2H2019 to US$187.8 million in 2H2020.

The robust CPO prices should provide temporary support for the Wilmar (F34) share price. However, there is no guarantee that the high CPO prices will be sustainable in the coming months as a lot will depend on the weather conditions and supply and demand dynamics.

With EPS of $0.32, the Price/Earning ratio is 16.5. This means that Wilmar (F34) share price is [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Updated: March 1, 2021 — 7:31 am

6 Comments

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  1. Hi Gerald, When did you exit this stock?

    Few stocks in this market have been on a upward trend for several years, unlike US market where the trading volume for a normal stock could easily exceed the entire market here.

  2. Hi Can you please comments on the taking over delisting of guocoleisure limited shares of $0.70 cents while it is currently trading at $0.73 cts. Also SIAS appealing for two more weeks extension of expiry date i.e. 4-3-2021. What must investor like me do. Can I wait or adhere to the expiry date and sell the shares as there is still no new of the appeal. Thanks

  3. Hi Leo,

    I exited last month when the GME saga took place. I feel that there is too much volatility in the market back then.
    Agree with you that SGX has been a huge laggard despite the bullish form of US market.

    Regards,
    Gerald
    https://sgwealthbuilder.com

  4. Hi Gek Huay,

    Thank you for your support. Regarding the delisting offer, the extension of the closure date will depend whether the minimum acceptance condition (90%) being met by the closing date. If so, then GL is obliged to extend the offer.

    I am unable to advise whether you should accept the offer because I am not licensed to do so. In addition, I also do not know your entry prices for this counter. However, if you think that the offer is not acceptable, then you may not want to accept the offer. But bear in mind that offer may become unconditional if the majority of the shareholders (>90%) accept the offer.

    My view is that the offer is fair. Given that the hotel assets in London had been badly impacted by COVID-19, the Group suffered losses in FY2020. There is a lot of uncertainties on when the hospitality sector will recover in London. In view of this, the short term outlook for GL is challenging. Please note that this is not an advice. Thank you.

    Regards,
    Gerald
    https://sgwealthbuilder.com

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