Credit Suisse also cut its target price for Wilmar to 3.10 Singapore dollars per share from 4 Singapore dollars per share previously. The credit service said it anticipated a “knee-jerk downward reaction” to Wilmar’s share price following the announcement. Wilmar’s share price ended down nearly 6% on July 20 after trading as low as 12% down earlier in the day.
“If Wilmar’s share price falls toward its 52-week low of 2.52 Singapore dollars, it could be an interesting entry point to invest in Wilmar for the longer term, as we are a believer that Wilmar will successfully expand its consumer product division in the long term,” Credit Suisse said.
Wilmar’s share price dipped as low as 2.96 Singapore dollars on July 20.
In its profit warning issued on July 19, Wilmar said its second-quarter losses largely were due to the manufacturing sub-segment within Oilseeds and Grains and partially to the Sugar segment.
Untimely purchases of raw materials, specifically soybeans, in a highly volatile and disruptive market, resulted in significant losses being recorded in the segment, Wilmar said. Also unexpected flooding in Argentina affected the soybean harvest, and heavy participation by funds in the futures markets, among other factors, contributed to the very volatile markets.
The company will release its unaudited consolidated financial results for its second quarter and first half of 2016 on Aug. 11.
