Asia Pacific Equity Research

28 May 2012

Neutral

Wilmar International Limited

Early April oilseeds crush margin recovery appears short-lived - downgrade to Neutral
Oilseeds crush margin recovery in April appears short-lived, downgrade to Neutral: Based on our calculations as well as on industry sources such as the China National Grains & Oils Information Center, the strong recovery in China soybean crush margin was short-lived, with downtrend continuing through May. We now see little likelihood of the oilseeds & grains segment reversing its losses in 1Q12. Consensus forecast may still have downside - heightened probability of a 2Q12 miss: Following the weak 1Q12 results, consensus revised FY12 earnings down by c.9% while we have revised down by 17%, leaving us 9% below consensus. With the tough crush margin environment, it now appears likely that 2Q12 may see flat to weaker earnings Q/Q. Assuming flat Q/Q earnings for 2Q12, Wilmar will need to deliver c.US$572 million of core net profit each for 3Q12 and 4Q12. However, Wilmar's best quarter was in 3Q09 with core net profit of US$486 million, when the oilseeds & grains segment reported a US$50/MT margin. We therefore believe consensus earnings estimate has further downside of c.20-30%, if oilseeds crush margin remains under pressure into 2H12. Limited sugar growth with lower price outlook and long plantations gestation: Sugar price has corrected c.14% YTD. Even if Wilmar has hedged most of its sugar prices for FY12E, the bearish price outlook may imply little to no growth in the segment in FY13E since the Papua plantations are still in the gestation phase. JPM Global Commodities team sees sugar trending down to 18cts/lb as it expects global surplus through 2013 - the last time there was a global surplus was between 2002 and 2004 when futures price fell to an intraday low of 5.27cts/lb (12-Feb-04). Downgrade to N, Jun-13 SOTP PT S$4.30: We forecast -US$5/MT margin for FY12E oilseeds & grains, trimming earnings by a further 6%. We now value both the oilseeds & grains and the sugar segments at book value in our SOTP, given the lack of oilseeds margin recovery and the slow pace in sugar plantations ramp-up. Our new PT implies 16x/13x FY12E/FY13E P/E, implying a de-rating from the mean of 19x on which it has been trading.
Wilmar International Limited (Reuters: WLIL.SI, Bloomberg: WIL SP) $ in mn, year-end Dec FY10A FY11A FY12E FY13E Revenue ($ mn) 30,378 44,710 51,384 58,227 Net Profit ($ mn) 1,324 1,601 1,334 1,642 Net Profit (Recurring) ($ mn) 1,052 1,517 1,334 1,642 EPS ($) 0.21 0.25 0.21 0.26 EPS (Recurring) ($) 0.16 0.24 0.21 0.26 DPS ($) 0.04 0.05 0.04 0.05 Revenue growth (%) 27% 47% 15% 13% EPS growth (%) (28%) 21% (17%) 23% EPS (Recurring) Growth (33%) 44% (12%) 23% ROE 12% 13% 10% 11% P/E (x) 14.2 11.8 14.1 11.5 P/BV (x) 1.6 1.4 1.3 1.2 Dividend Yield 1.4% 1.7% 1.4% 1.7%
Source: Company data, Bloomberg, J.P. Morgan estimates.

Previous: Overweight WLIL.SI, WIL SP Price: S$3.76

Price Target: S$4.30

Previous: S$5.20

Singapore Plantations Ying-Jian Chan, CFA

AC

(65) 6882-2378 ying.jian.yj.chan@jpmorgan.com J.P. Morgan Securities Singapore Private Limited

Simone Yeoh
(60-3) 2270-4710 simone.x.yeoh@jpmorgan.com JPMorgan Securities (Malaysia) Sdn. Bhd. (18146-X)
Price Performance
6.0 5.5 S$ 5.0 4.5 4.0 3.5
May-11 Aug-11 Nov-11 Feb-12 May-12

WLIL.SI share price (S$) FTSTI (rebased)

Abs Rel

YTD -24.8% -30.1%

1m -22.6% -16.1%

3m -26.1% -20.0%

12m -29.7% -18.4%

FY14E 67,153 1,694 1,694 0.26 0.26 0.05 15% 3% 3% 10% 11.1 1.1 1.8%

Company Data 52-week Range (S$) Mkt Cap (S$ mn) Mkt Cap ($ bn) Price (S$) Date Of Price Free float (%) 3-mth trading volume 3-mth trading value (S$ mn) 3-mth trading value ($ mn) FTSTI Exchange Rate Fiscal Year End

6.05 - 3.70 24,071.93 18.83 3.76 28 May 12 24.0% 9.92 43.32 33.88 2,773 1.28 Dec

See page 12 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. www.morganmarkets.com

Ying-Jian Chan, CFA (65) 6882-2378 ying.jian.yj.chan@jpmorgan.com

Asia Pacific Equity Research 28 May 2012

Company Description Wilmar International is engaged in the businesses of oil palm cultivation, oilseeds crushing, edible oils refining, consumer pack edible oils processing and merchandising, specialty fats, oleochemicals, biodiesel, fertilisers and soy protein manufacturing, rice and flour milling, and grains merchandising. Its strategy involves building an integrated business model to capture the entire value chain of the agricultural commodity processing business, from origination, processing and transportation to the branding, merchandising and distribution of a wide range of products.

P&L sensitivity metrics Palm & laurics margin assumption Impact of each US$10 increase Oilseeds & grains margin assumption Impact of each US$10 increase Consumer products margin assumption Impact of each US$10 increase
Source: J.P. Morgan estimates.

EBITDA impact (%) FY12E: 9.0 FY12E: 8.8 FY12E: 1.9

EPS impact (%) 35.0 13.4 -5.0 13.1 35.0 2.8

Price target and valuation analysis Our Jun-2013 PT of S$4.30 is based on sum-of-the-parts as shown below:

Revenue breakdown (FY12E)

4% 3% 6%

P/E (x) Merchandising & processing - Palm and laurics - Oilseeds and grains Consumer products Plantation and palm oil mills Sugar Associates RNAV for property investments Fair value of Wilmar International (US$) Fair value of Wilmar International (S$) Price target (S$) 12.0 0.0 12.0 15.0 9.0

Per share 1.23 0.53 0.26 1.17 0.06 0.11 0.00 3.37 4.30 4.30

14% 27%

46%

Palm and laurics Consumer Sugar

Oilseeds & grains Plantation & PO mills Others

Source: J.P. Morgan estimates

Core net income: J.P. Morgan vs consensus US$ MM J. P. Morgan Consensus FY12E 1,334 1,555 FY13E 1,642 1,803 FY14E 1,694 1,989
Source: J.P. Morgan estimates, Bloomberg.

Our Jun-2013 PT implies 16x/13x FY12E/FY13E P/E. Key downside risks: (1) losses from palm oil and/or oilseeds arising from wrong directional trades; (2) margin compression from competition. Key upside risks include (1) strong recovery in oilseeds crush margin, and (2) delay in Malaysian countermeasures to favorable Indonesia palm oil export tax structure sustaining high Indonesian refining margin.

Peer valuation comparison

Ticker First Resources Golden Agri Indofood Agri Kencana Agri Mewah International Wilmar International Weighted average FR SP GGR SP IFAR SP KAGR SP MII SP WIL SP Price (LC) 1.60 0.65 1.20 0.33 0.41 3.76 Rating OW N OW NR N N Mkt cap (US$mn) 1,975 6,138 1,354 297 484 18,872 9,951 CY12E 11.3 10.7 8.1 14.4 9.7 14.1 10.4 P/E CY13E 9.8 10.0 7.4 9.2 7.9 11.5 9.5 EV/ha (US$) 2yr EPS CAGR FY12E 2012 - 2013E 25,735 9.7% 20,574 1.4% 12,977 12.1% NA 18.3% NA 35.8% NA 4.0% 19,564 6.2% P/B FY12E 2.0 0.7 0.9 1.1 0.8 70.7 1.0 ROE FY12E 17.7 6.9 11.4 8.3 9.0 2.2 9.7 Div Yld FY12E 2.2% 2.8% 0.3% 1.5% 2.6% 1.3% 2.4% Target (LC) 2.20 0.75 1.90 NR 0.52 4.30

Source: J.P. Morgan estimates, Bloomberg, Bloomberg consensus for Kencana. Prices as of 28 May 2012 market close.

Ying-Jian Chan, CFA (65) 6882-2378 ying.jian.yj.chan@jpmorgan.com

Asia Pacific Equity Research 28 May 2012

Oilseeds weakness may extend to 2Q

Recovery in April appears short-lived
Based on our calculations as well as from industry sources such as the China National Grains & Oils Information Center, the strong recovery in China soybean crush margin was short-lived, with downtrend continuing through May. According to a recent Bloomberg article, Chinese buyers have cancelled one to two soybean cargoes and deferred two to three shipments China may default or defer on more cargoes going forward as the losses at crushers may widen... The government is selling its soybean stockpiles to increase supply while theres no sign of recovery in the downstream markets such as soybean meal and soybean oil, according to the report. We therefore believe the likelihood of the oilseeds & grains segment reversing its losses in 1Q12 is now quite low, as the weakness in the segment extends into 2Q, unless Wilmar is able to generate trading profits to boost its per MT margin.
Figure 1: China back-to-back oilseeds crush margin
US$/MT

250 200 150 100 50

Apr-09 Jul-09 Oct-09 Apr-10 Jul-10 Oct-10 Apr-11 Jul-11 Oct-11 Jan-09 Jan-10 Jan-11 Jan-12 Apr-12
3

Source: J.P. Morgan estimates, Bloomberg.

Further downside to consensus forecast 2Q12 may miss again

Following the weak 1Q12 results, consensus revised FY12 earnings down by c.9% while we have revised down by 17%, leaving us 9% below consensus. With the tough crush margin environment, it now appears likely that 2Q12 may see flat to weaker earnings Q/Q. Assuming flat Q/Q earnings for 2Q12, Wilmar will need to deliver c.US$572 million of core net profit each for 3Q12 and 4Q12. However, Wilmar's best quarter was in 3Q09 with core net profit of US$486 million, and oilseeds & grains segment reporting US$50/MT of margin then. We therefore believe consensus earnings estimates have further downside of c.20-30%, if oilseeds crush margin remains under pressure into 2H12.

Ying-Jian Chan, CFA (65) 6882-2378 ying.jian.yj.chan@jpmorgan.com

Asia Pacific Equity Research 28 May 2012

Figure 2: Quarterly profit trend and estimates (assuming 2Q12 to be flat Q/Q)
700 600 500 400 300 200 100 0 572 572 486 60 40 20 206 206 0 -20 -40 -60

Core net profit (US$ in millions) (L)

Source: J.P. Morgan estimates, Company data.

Oilseeds & grains margin (US$/MT) (R)

Bearish sugar price outlook

Sugar price has corrected c.14% YTD. Even if Wilmar has hedged most of its sugar prices for FY12E, the bearish price outlook may imply little to no growth in the segment in FY13E since the Papua plantations are still in the gestation phase.
Figure 3: Sugar price trend
US cts/lb

40 35 30 25 20 15 10 5 0 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12

Source: Bloomberg.

JPM Global Commodities team sees sugar trending down to 18cts/lb as it expects global surplus through 2013 - the last time there was a global surplus was between 2002 and 2004 when futures price fell to an intraday low of 5.27cts/lb (12-Feb-04).

Ying-Jian Chan, CFA (65) 6882-2378 ying.jian.yj.chan@jpmorgan.com

Asia Pacific Equity Research 28 May 2012

Figure 4: Largest global stock-building period since 2002 to 2004

Million MT

Source: ISO, J.P. Morgan Commodities Research.

Figure 5: J.P. Morgan Agricultural Commodity Price Forecasts

Source: J.P. Morgan Commodities Research.

Changes to earnings estimates and PT

Downgrade to Neutral, Jun-13 SOTP PT of S$4.30
We now forecast -US$5/MT margin for FY12E oilseeds & grains, trimming earnings by a further 6%. We also now value both the oilseeds & grains and the sugar segments at book value in our SOTP, given the lack of oilseeds margin recovery and the slow pace in sugar plantations ramp-up. Our new PT implies 16x/13x FY12E/FY13E P/E, signifying a de-rating from the mean of 19x that it has been trading.

Ying-Jian Chan, CFA (65) 6882-2378 ying.jian.yj.chan@jpmorgan.com

Asia Pacific Equity Research 28 May 2012

Table 1: Key assumptions

US$ in millions, unless otherwise stated FY08 Vol by seg ('000 MT) Merchandising & proc'ing - Palm and laurics - Oilseeds and grains (total) - Oilseeds - Rice - Flour Consumer products Plantation and palm oil mills - FFB production - CPO production - Palm kernel production Sugar - Milling - Merchandising & proc'ing Vol growth by seg Merchandising & proc'ing - Palm and laurics - Oilseeds and grains (total) Consumer products Plantation and palm oil mills - FFB production - CPO production - Palm kernel production Sugar - Milling - Merchandising & proc'ing PBT by segment Merchandising & proc'ing - Palm and laurics - Oilseeds and grains Consumer products Plantation and palm oil mills Sugar Others Share of associates' profits Unallocated expenses PBT growth by segment Merchandising & proc'ing - Palm and laurics - Oilseeds and grains Consumer products Plantation and palm oil mills Sugar Others Share of associates' profits Unallocated expenses % PBT Merchandising & proc'ing - Palm and laurics - Oilseeds and grains Consumer products Plantation and palm oil mills Sugar Others
6

FY09 34,678 19,070 15,608 15,608 3,191 3,213 1,576 368

FY10 39,101 20,820 18,281 18,281 401 510 3,679 3,349 1,598 372

FY11 40,245 20,306 19,939 19,939 671 510 4,397 4,073 1,779 414 2,669 2,458

FY12E 48,195 24,367 23,828 21,933 1,079 816 5,057 4,191 2,106 491 2,168 1,348 19.8% 20.0% 19.5% 15.0% 2.9% 18.4% 18.6% -18.8% -45.2% 1,727 734 853 (119) 177 649 91 69 103 (96) -17% -27% 46% -128% 107% -12% -35% 66% -45% -18% 100% 42% 49% -7% 10% 38% 5% 4%

FY13E 53,305 26,804 26,501 24,126 1,355 1,020 5,815 4,316 2,169 505 2,295 1,348 10.6% 10.0% 11.2% 15.0% 3.0% 3.0% 3.0% 5.9% 0.0% 2,126 1,071 938 133 204 669 101 83 116 (117) 23% 46% 10% -211% 15% 3% 11% 20% 13% 23% 100% 50% 44% 6% 10% 31% 5% 4%

FY14E 60,787 29,484 31,303 26,539 2,724 2,040 6,687 4,446 2,234 520 2,550 1,348 14.0% 10.0% 18.1% 15.0% 3.0% 3.0% 3.0% 11.1% 0.0% 2,193 1,041 885 157 234 689 117 99 134 (122) 3% -3% -6% 18% 15% 3% 16% 20% 15% 4% 100% 47% 40% 7% 11% 31% 5% 5%

32,721 19,433 13,288 13,288 3,062 2,960 1,505 350

31.8% 38.9% 22.7% 71.7% 30.6% 26.1% 25.1%

6.0% -1.9% 17.5% 4.2% 8.5% 4.7% 5.0%

12.8% 9.2% 17.1% 15.3% 4.2% 1.4% 1.0%

2.9% -2.5% 9.1% 19.5% 21.6% 11.3% 11.3%

1,789 1,235 645 590 75 327 73 111 (32) 116% 179% 150% 219% -28% 15% 413% 86% -59% 100% 69% 36% 33% 4% 18% 0% 4%

2,294 1,300 693 607 225 397 84 46 242 28% 5% 7% 3% 198% 21% 16% -58% -859% 100% 57% 30% 26% 10% 17% 0% 4%

1,644 705 587 118 150 636 189 38 (73) -28% -46% -15% -81% -33% 60% 125% -18% -130% 100% 43% 36% 7% 9% 39% 0% 11%

2,079 1,009 586 423 85 734 141 42 185 (117) 26% 43% 0% 260% -43% 15% -78% 386% 62% 100% 49% 28% 20% 4% 35% 7% 2%

Ying-Jian Chan, CFA (65) 6882-2378 ying.jian.yj.chan@jpmorgan.com

Asia Pacific Equity Research 28 May 2012

PBT/MT margin Oilseeds & grains FY12E: From US$0 to US$5

Share of associates' profits Unallocated expenses PBT/MT by segment (US$/MT) Merchandising & proc'ing - Palm and laurics - Oilseeds and grains (blended) - Oilseeds - Rice - Flour Consumer products Sugar - milling Sugar - refining

6% -2% 37.75 33.19 44.43

2% 11% 37.48 36.33 38.88

2% -4% 18.02 28.20 6.43 6.43 0.00 0.00 40.72

9% -6% 25.07 28.85 21.21 21.21 0.00 0.00 19.40

6% -6% 15.22 35.00 (5.00) (5.00) (5.00) (5.00) 35.00 29.67 20.00

5% -6% 20.09 35.00 5.00 5.00 5.00 5.00 35.00 32.47 20.00

6% -6% 17.13 30.00 5.00 5.00 5.00 5.00 35.00 35.44 20.00

24.65

70.59

Source: J.P. Morgan estimates, Company data.

Figure 6: Bloomberg consensus earnings revision and share price

Source: Bloomberg.

Ying-Jian Chan, CFA (65) 6882-2378 ying.jian.yj.chan@jpmorgan.com

Asia Pacific Equity Research 28 May 2012

Table 2: Wilmar sum of parts valuation

US$ in millions, unless otherwise stated FY12E PATMI Merchandising & processing - Palm and laurics - Oilseeds and grains Consumer products Plantation and palm oil mills Sugar Associates RNAV for property investments Fair value of Wilmar International (US$) Fair value of Wilmar International (S$) Price target (S$) Current price (S$) Upside to price target No of shares outstanding (million)
Source: J.P. Morgan estimates.

P/E 12.0x 12.0x 15.0x 9.0x

Valuation 7,905 3,424 1,640 7,520 369 714 25 21,598

Per share 1.23 0.53 0.26 1.17 0.06 0.11 0.00 3.37 4.30 4.30 3.76 14%

Remarks 30% to Malaysian refining peer, Mewah, due to Indonesia exposure and global operations. Valued at FY12E book value. In line with the palm & laurics segment. In line with target P/E for major Malaysian and Indonesian peers. Valued at book value. In line with P/E applied to value China Agri-Industries Based on Wilmar's 35% stake in JV.

659 137 501 79

6,403

Figure 7: 12-month forward P/E

(x)

30 25 20 15 10 5 0 +2 SD: 16.2x +1 SD: 12.6x Mean: 9.0x

Re-rating post Wilmar China IPO news.

-1 SD: 16.6x -2 SD: 14.2x

+2 SD: 23.6x +1 SD: 21.2x Mean: 18.9x x

-1 SD: 5.4x -2 SD: 1.8x

Aug-06

Oct-06

Dec-06

Feb-07

Apr-07

Aug-07

Oct-07

Dec-07

Feb-08

Apr-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

Aug-11

Oct-11

Dec-11 Dec-11

Feb-12

Jun-07

Jun-08

Jun-09

Jun-10

12M Fwd P/E

Source: J.P. Morgan estimates, Company data, Bloomberg.

Mean

-2 S.D.

-1 S.D.

+1 S.D.

Figure 8: 12-month trailing P/B

(x)

Feb-08

Feb-09

Feb-10

Feb-11

Aug-07

Dec-07

Aug-08

Dec-08

Aug-09

Dec-09

Aug-10

Dec-10

Aug-11

Feb-12

4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0

Oct-07 Jun-07

+1 SD: 2.8x Mean: 2.1x -1 SD: 1.4x +1 SD: 2.7x Mean: 2.3x -1 SD: 2.0x
Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Jun-08 Jun-09 Jun-10 Jun-11 Apr-12

12M Trailing P/B

Source: J.P. Morgan estimates, Company data, Bloomberg.

Mean

-2 S.D.

-1 S.D.

+1 S.D.

Jun-11

+2 S.D.

+2 S.D.

Apr-12

Ying-Jian Chan, CFA (65) 6882-2378 ying.jian.yj.chan@jpmorgan.com

Asia Pacific Equity Research 28 May 2012

Table 3: Regional peer valuation comparison

As at: 28 May-12 Indonesia Astra Agro Lestari Bakrie Sumatera Plant BW Plantation London Sumatra Indon Salim Ivomas Pratama Sampoerna Agro Weighted average* Malaysia Genting Plantations Hap Seng Plantations IJM Plantations IOI Corporation Kuala Lumpur Kepong Kulim Malaysia Sarawak Plantation Sime Darby Weighted average* Singapore First Resources Golden Agri-Resources Indofood Agri Resources Kencana Agri Mewah International Wilmar International Weighted average* Sector weighted average* Ticker Price (LC) AALI IJ UNSP IJ BWPT IJ LSIP IJ SIMP IJ SGRO IJ GENP MK HAPL MK IJMP MK IOI MK KLK MK KUL MK SPLB MK SIME MK FR SP GGR SP IFAR SP KAGR SP MII SP WIL SP 19,600 250 1,240 2,475 1,200 2,775 9.04 2.91 3.00 5.00 22.08 4.60 2.58 9.52 1.60 0.65 1.20 0.33 0.41 3.76 N NR NR OW NR NR UW NR NR UW N NR NR OW OW N OW NR N N Rtg Mkt cap (US$mn) 3,307 367 537 1,809 2,034 562 5,116 2,180 740 764 10,209 7,490 1,845 230 18,179 38,057 1,975 6,138 1,354 297 484 18,872 9,951 53,125 P/E CY12E 11.3 6.2 12.7 10.7 10.4 9.0 11.1 14.3 10.2 12.7 14.8 15.5 13.1 7.8 13.0 14.0 11.3 10.7 8.1 14.4 9.7 14.1 10.4 13.1 CY13E 11.1 5.2 9.1 11.3 8.8 8.0 11.2 13.3 9.4 11.8 13.4 13.6 12.2 6.8 11.7 12.6 9.8 10.0 7.4 9.2 7.9 11.5 9.5 11.9 EV/ha (US$) FY12E 18,549 NA NA 16,655 NA NA 17,880 34,409 NA NA 54,420 42,842 NA NA 25,067 36,975 25,735 20,574 12,977 NA NA NA 19,564 49,436 2yr EPS CAGR 2012 - 13E 4.9% -6.0% 31.1% 0.4% 9.0% 9.9% 3.3% 7.6% -1.0% 7.6% 9.2% 5.9% -8.2% 13.2% 10.9% 9.3% 9.7% 1.4% 12.1% 18.3% 35.8% 4.0% 6.2% 8.1% P/B FY12E 3.4 0.4 2.8 2.6 1.3 1.8 3.1 1.9 1.2 1.7 2.4 3.1 1.3 NA 2.2 2.4 2.0 0.7 0.9 1.1 0.8 70.7 1.0 2.2 ROE FY12E 31.5 5.9 25.0 26.6 13.5 21.1 29.8 14.1 11.7 13.8 16.2 19.8 12.5 14.2 16.5 16.9 17.7 6.9 11.4 8.3 9.0 2.2 9.7 16.8 Div Yld FY12E 5.8% 0.8% 1.0% 3.7% 2.4% 3.7% 5.1% 1.7% 6.6% 3.0% 3.5% 3.6% 1.3% 6.5% 3.6% 3.5% 2.2% 2.8% 0.3% 1.5% 2.6% 1.3% 2.4% 3.4% Target (LC) 22,500 NR NR 2,900 NR NR 8.60 NR NR 5.00 24.10 NR NR 11.60 2.20 0.75 1.90 NR 0.52 4.30

Source: J.P. Morgan estimates, Bloomberg, Bloomberg consensus for stocks Not Rated (NR).

Ying-Jian Chan, CFA (65) 6882-2378 ying.jian.yj.chan@jpmorgan.com

Asia Pacific Equity Research 28 May 2012

Wilmar International Limited: Summary of Financials

Income Statement $ in millions, year end Dec Revenues % change Y/Y Gross Margin EBITDA % change Y/Y EBITDA Margin EBIT % change Y/Y EBIT Margin Net Interest Earnings before tax % change Y/Y Tax as % of EBT Minority Interest Net income (reported) % change Y/Y Net Profit (Recurring) Shares outstanding EPS (reported) Balance sheet $ in millions, year end Dec Cash Accounts receivable Inventories Others Current assets LT investments Net fixed assets Total Assets Cash flow statement FY10 FY11 FY12E FY13E FY14E $ in millions, year end Dec 30,378 44,710 51,384 58,227 67,153 Profit before tax 27% 47% 15% 13% 15% Depreciation & amortization 8.3% 8.7% 7.2% 7.4% 7.0% Change in working capital 1,814 2,737 2,572 3,030 3,195 Other non-cash items -28.7% 50.8% -6.1% 17.8% 5.5% Cash flow from operations 6% 6% 5% 5% 5% Capex 1,563 2,257 2,015 2,387 2,465 Disposal/(purchase) (32%) 44% (11%) 18% 3% Cash flow from investing 5% 5% 4% 4% 4% Equity raised/(repaid) -73 -259 -391 -377 -406 Debt raised/(repaid) 1,644 2,079 1,727 2,126 2,193 Other -28.3% 26.4% -16.9% 23.1% 3.2% Dividends paid -190 -379 -311 -383 -395 Cash flow from financing 11.5% 18.2% 18.0% 18.0% 18.0% Net change in cash -131 -99 -82 -101 -104 Beginning cash 1,324 1,601 1,334 1,642 1,694 Ending cash (30%) 21% (17%) 23% 3% 1,052 1,517 1,334 1,642 1,694 6,400 6,402 6,402 6,402 6,402 Free cash flow 0.21 0.25 0.21 0.26 0.26 DPS Ratio Analysis FY10 FY11 FY12E FY13E FY14E $ in millions, year end Dec 6,788 7,898 9,781 8,852 7,629 EBITDA margin 3,126 3,503 4,026 4,562 5,261 EBIT margin 6,737 7,265 8,350 9,462 10,912 Net profit margin 3,375 5,098 5,098 5,098 5,098 SG&A/Sales 20,026 23,765 27,255 27,973 28,900 1,270 1,579 1,579 1,579 1,579 Sales growth 6,112 7,469 8,413 9,269 10,039 EBIT growth 33,969 39,640 44,073 45,649 47,345 Net profit growth EPS growth Short-term loans 14,904 18,409 20,000 20,000 20,000 Payables 1,447 1,710 1,965 2,227 2,568 Interest coverage (x) Others 1,918 2,011 2,011 2,011 2,011 Net debt to equity Total current liabilities 18,269 22,130 23,976 24,238 24,579 Long-term debt 2,522 2,480 4,000 4,000 4,000 Sales/assets Other liabilities 621 782 782 782 782 Assets/equity Total Liabilities 21,412 25,391 28,758 29,019 29,361 ROCE Shareholders' equity 11,856 13,370 14,437 15,751 17,106 ROE Total Liabilities & equity 33,969 39,640 44,073 45,649 47,345 BVPS 1.85 2.09 2.26 2.46 2.67 Source: Company reports and J.P. Morgan estimates. FY10 FY11 FY12E FY13E FY14E 1,644 2,079 1,727 2,126 2,193 251 480 556 643 730 -3,926 22 -1,352 -1,386 -1,808 -58 161 309 276 302 -2,319 1,948 538 899 616 -997 -1,482 -1,500 -1,500 -1,500 111 47 0 0 0 -2,629 -2,068 -1,500 -1,500 -1,500 12 11 0 0 0 7,665 3,762 3,111 0 0 -2,337 -2,494 0 0 0 -385 -280 -267 -328 -339 4,956 1,000 2,844 -328 -339 8 879 1,882 -929 -1,223 5,135 6,788 7,898 9,781 8,852 5,143 7,667 9,781 8,852 7,629

-3,316 0.04 FY10 6% 5% 4% 4.9% 27% (32%) (30%) (28%) 25 87% 106% 166% 6% 12%

466 0.05

-962 0.04

-601 0.05

-884 0.05

FY11 FY12E FY13E FY14E 6% 5% 5% 5% 5% 4% 4% 4% 4% 3% 3% 3% 5.7% 5.3% 5.4% 5.4% 47% 44% 21% 21% 11 95% 121% 159% 7% 13% 15% (11%) (17%) (17%) 7 96% 123% 305% 6% 10% 13% 18% 23% 23% 8 94% 130% 290% 6% 11% 15% 3% 3% 3% 8 94% 144% 277% 6% 10%

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Ying-Jian Chan, CFA (65) 6882-2378 ying.jian.yj.chan@jpmorgan.com

Asia Pacific Equity Research 28 May 2012

JPM Q-Profile
Wilmar International Ltd. (SINGAPORE / Consumer Staples)
As Of: 25-May-2012 Quant_Strategy@jpmorgan.com

Local Share Price

8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 Apr/97 Nov/97 Jun/98 Jan/99 Aug/99 Mar/00 Oct/00 May/01 Dec/01 Jul/02 Feb/03 Sep/03 Apr/04 Nov/04 Jun/05 Jan/06 Aug/06 Mar/07 Oct/07 May/08

Current:

3.80

12 Mth Forward EPS

0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05

Current:

0.26

Dec/08

Jul/09

Feb/10

Sep/10

Apr/11

Nov/11

0.00 May/01 Jul/02 May/08 Apr/97 Nov/97 Jun/98 Jan/99 Aug/99 Mar/00 Oct/00 Dec/01 Feb/03 Sep/03 Apr/04 Nov/04 Jun/05 Jan/06 Aug/06 Mar/07 Oct/07 Dec/08 Jul/09 Feb/10 Sep/10 Sep/10 Apr/11 Apr/11 Apr/11 Apr/11 Nov/11 Nov/11 Nov/11 Nov/11

Earnings Yield (& local bond Yield)

12% 10% 8% 6% 4% 2% 0% Apr/97 Nov/97 Jun/98 Jan/99 Aug/99 Mar/00 Oct/00 May/01 Dec/01 Jul/02 Feb/03 Sep/03 Apr/04 Nov/04 Jun/05 Jan/06 Aug/06 Mar/07 Oct/07 May/08
12Mth fwd EY Singapore BY Proxy

Current:

9%

Implied Value Of Growth*

0.80 0.60 0.40 0.20 0.00 -0.20

Current:

-29.08%

Dec/08

Jul/09

Feb/10

Sep/10

Apr/11

Nov/11

-0.40 Apr/97 Nov/97 Jun/98 Jan/99 Aug/99 Mar/00 Oct/00 May/01 Dec/01 Jul/02 Feb/03 Sep/03 Apr/04 Nov/04 Jun/05 Jan/06 Aug/06 Mar/07 Oct/07 May/08 Dec/08 Jul/09 Feb/10

PE (1Yr Forward)
35.0x 30.0x 25.0x 20.0x 15.0x 10.0x 5.0x 0.0x Apr/97 Nov/97 Jun/98 Jan/99 Aug/99 Mar/00 Oct/00 May/01 Dec/01 Jul/02 Feb/03 Sep/03 Apr/04 Nov/04 Jun/05 Jan/06 Aug/06 Mar/07 Oct/07 May/08

Current:

11.6x

Price/Book Value
12.0x 10.0x 8.0x 6.0x 4.0x 2.0x 0.0x
PBV hist PBV Forward

Current:

1.4x

Dec/08

Jul/09

Feb/10

Sep/10

Apr/11

Nov/11

-2.0x Apr/97 Nov/97 Jun/98 Jan/99 Aug/99 Mar/00 Oct/00 May/01 Dec/01 Jul/02 Feb/03 Sep/03 Apr/04 Nov/04 Jun/05 Jan/06 Aug/06 Mar/07 Oct/07 May/08 Dec/08 Jul/09 Feb/10 Sep/10

ROE (Trailing)
60.00 40.00 20.00 0.00 -20.00 -40.00 -60.00 -80.00 Apr/97 Nov/97 Jun/98 Jan/99 Aug/99 Mar/00 Oct/00 May/01 Dec/01 Jul/02 Feb/03 Sep/03 Apr/04 Nov/04 Jun/05 Jan/06 Aug/06 Mar/07 Oct/07 May/08

Current:

11.35

Dividend Yield (Trailing)

3.0 2.5 2.0 1.5 1.0 0.5 0.0 Apr/97 Nov/97 Jun/98 Jan/99 Aug/99 Mar/00 Oct/00 May/01 Dec/01 Jul/02 Feb/03 Sep/03 Apr/04 Nov/04 Jun/05 Jan/06 Aug/06 Mar/07 Oct/07 May/08 Dec/08

Current:

1.23

Jul/09

Feb/10

Dec/08

Feb/10

Sep/10

Summary
Wilmar International Ltd. SINGAPORE Consumer Staples 12mth Forward PE P/BV (Trailing) Dividend Yield (Trailing) ROE (Trailing) Implied Value of Growth 19988.13 41.03575 SEDOL B17KC69 Food Products Latest Min 9.25 11.56x 0.53 1.40x 0.00 1.23 -64.86 11.35 -0.33 -29.1% 25-May-12 As Of: 3.80 Local Price: 0.26 EPS: % to Max % to Med % to Avg 149% 40% 47% 588% 44% 62% 125% -67% -50% 274% 7% -32% 291% 163% 151%

Max 28.80 9.66 2.78 42.43 0.56

Median 16.22 2.03 0.41 12.18 0.18

Nov/11

Average 16.99 2.27 0.61 7.74 0.15

2 S.D.+ 26.10 5.93 2.10 57.48 0.64

2 S.D. 7.87 -1.39 -0.87 -41.99 -0.34

% to Min -20% -62% -100% -672% -13%

Source: Bloomberg, Reuters Global Fundamentals, IBES CONSENSUS, J.P. Morgan Calcs

* Implied Value Of Growth = (1 - EY/Cost of equity) where cost of equity =Bond Yield + 5.0% (ERP)

Sep/10

Jul/09

Apr/11

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Ying-Jian Chan, CFA (65) 6882-2378 ying.jian.yj.chan@jpmorgan.com

Asia Pacific Equity Research 28 May 2012

Analyst Certification: The research analyst(s) denoted by an AC on the cover of this report certifies (or, where multiple research analysts are primarily responsible for this report, the research analyst denoted by an AC on the cover or within the document individually certifies, with respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views expressed in this report accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of any of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report.

Important Disclosures

Analyst Position: The following analysts (and/or their associates or household members) own a long position in the shares of Wilmar International Limited: Ying-Jian Chan. Client: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients: Wilmar International Limited. Client/Non-Investment Banking, Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients, and the services provided were non-investment-banking, securities-related: Wilmar International Limited. Client/Non-Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients, and the services provided were non-securities-related: Wilmar International Limited. Investment Banking (next 3 months): J.P. Morgan expects to receive, or intends to seek, compensation for investment banking services in the next three months from Wilmar International Limited. Non-Investment Banking Compensation: J.P. Morgan has received compensation in the past 12 months for products or services other than investment banking from Wilmar International Limited. Company-Specific Disclosures: Important disclosures, including price charts, are available for compendium reports and all J.P. Morgan covered companies by visiting https://mm.jpmorgan.com/disclosures/company, calling 1-800-477-0406, or emailing research.disclosure.inquiries@jpmorgan.com with your request.
Wilmar International Limited (WLIL.SI, WIL SP) Price Chart
12 11 10 9 8 7 Price(S$) 6 5 4 3 2 1 0 Sep 06 Jun 07 Mar 08 Dec 08 Sep 09 Jun 10 Mar 11 Dec 11 OW S$5.8 S$6.6 N OW S$8.2 S$4.6OW S$6.5 OW S$6.8 UW N S$6.8 S$9 OW OW S$7.2 OW S$5.2

Date 22-Jun-09

Rating Share Price (S$) OW OW N N N OW OW OW OW UW N OW OW OW 4.88 6.55 6.99 6.60 6.90 6.69 6.27 5.91 6.51 5.66 5.19 5.65 5.79 5.86 4.27

Price Target (S$) 5.80 6.80 6.80 6.60 6.80 9.00 8.20 7.80 7.20 4.60 5.40 6.50 6.80 6.00 5.20

OW S$6.8 S$6.8 N

OW S$7.8 S$5.4 N

OW S$6

14-Aug-09 25-Sep-09 12-Nov-09 11-Jan-10 25-Jan-10 13-Aug-10 06-Oct-10 10-Nov-10 03-Jan-11 04-Mar-11 18-Jul-11 16-Feb-12 22-Feb-12

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends. Initiated coverage Jun 22, 2009.

10-May-12 OW

The chart(s) show J.P. Morgan's continuing coverage of the stocks; the current analysts may or may not have covered it over the entire period. J.P. Morgan ratings: OW = Overweight, N= Neutral, UW = Underweight Explanation of Equity Research Ratings and Analyst(s) Coverage Universe: J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the average total return of the stocks in the analyst's (or the analyst's team's) coverage universe.] Neutral [Over the next six to twelve months, we expect this stock will perform in line with the average total return of the stocks in the analyst's (or the analyst's team's) coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of the stocks in the analyst's (or the analyst's team's) coverage universe.] In our Asia (ex-Australia) and UK small- and mid-cap equity research, each
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Ying-Jian Chan, CFA (65) 6882-2378 ying.jian.yj.chan@jpmorgan.com

Asia Pacific Equity Research 28 May 2012

stocks expected total return is compared to the expected total return of a benchmark country market index, not to those analysts coverage universe. If it does not appear in the Important Disclosures section of this report, the certifying analysts coverage universe can be found on J.P. Morgans research website, www.morganmarkets.com. Coverage Universe: Chan, Ying-Jian: China Agri-Industries (0606.HK), China Minzhong Food Corporation Limited (CMFC.SI), ComfortDelgro (CMDG.SI), First Resources Limited (FRLD.SI), Golden Agri-Resources Ltd (GAGR.SI), Indofood Agri Resources Ltd (IFAR.SI), Mewah International Inc (MEWI.SI), SMRT (SMRT.SI), ST Engineering (STEG.SI), SingPost (SPOS.SI), Wilmar International Limited (WLIL.SI) J.P. Morgan Equity Research Ratings Distribution, as of April 3, 2012
J.P. Morgan Global Equity Research Coverage IB clients* JPMS Equity Research Coverage IB clients* Overweight (buy) 45% 51% 43% 70% Neutral (hold) 43% 45% 48% 61% Underweight (sell) 12% 34% 9% 53%

*Percentage of investment banking clients in each rating category. For purposes only of FINRA/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold rating category; and our Underweight rating falls into a sell rating category.

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Ying-Jian Chan, CFA (65) 6882-2378 ying.jian.yj.chan@jpmorgan.com

Asia Pacific Equity Research 28 May 2012

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