Wilmar International (SGX: F34) is up 6% today in Singapore. F34 shares have no specific news to drive this price change so our assumption is just that the market view of the company has changed a little. The share price has recently been a little weak - the recent results showed a drop in revenues and profits - but perhaps now that’s passed views about the future are more cheerful.
For those who don’t know what’s done at Wilmar: “Wilmar International Limited operates as an agribusiness company in Singapore, South East Asia, the People's Republic of China, India, Europe, Australia/New Zealand, Africa, and internationally. The company operates through four segments: Food Products, Feed and Industrial Products, Plantation and Sugar Milling, and Others. The Food Products segment engages in the processing, branding, and distribution of a range of edible food products, including vegetable oil produced from palm and oilseeds, sugar, flour, rice, noodles, specialty fats, snacks, bakery, and dairy products.” And so on.
One thing worth noting as we have done when considering the much smaller Envictus. As China and SE Asia get richer more generally then we expect food spending to rise substantially. Richer people trade up their diet as they become richer after all.
Wilmar International share price from Google Finance
Those recent results were not quite what anyone wanted to see: “Wilmar International Limited (“Wilmar” or “the Group”), Asia’s leading agribusiness group, reported a net profit of US$550.9 million for the six months ended June 30, 2023 (“1H2023”) (1H2022: US$1.16 billion). Excluding losses from non-operating items, core net profit was US$577.2 million (1H2022: US$1.16 billion).”
Dents in operating profits do happen even if a company is well positioned as to market sector and global location. As we say, the Wilmar share price has been weak this past couple of weeks since the results came out. Our assumption is that today’s rise is simply a change of sentiment on the market about future prospects. As there’s no specific piece of news to tie this to it’s difficult to form any particular view of what comes next.