Seven plantation-based stocks on SGX enjoy strong gains

Wilmar was declared fifth most-traded stock overall on SGX.

Seven stocks with businesses include plantation have averaged 25% gains in 2021 YTD, bringing their average 12-month total return to 58%, according to a market update from the Singapore Exchange (SGX).

These stocks include Wilmar, Golden Agri-Res, First Resources, Sri-Trang Agro, Olam, Bumitama Agri, and Del Monte Pacific. They are also included amongst the 200 most-traded stocks on SGX.

The two strongest performing stocks of the seven over the past 12 months, Sri-Trang Agro and Del Monte Pacific, reported turnaround profits for the respective periods of FY2020 and H1 FY2021.

For the past seven weeks, Wilmar has led the Strait Times Index (STI) stocks in performance with an 18% YTD gain, bringing its 12-month total return to 39%. The stock has also been recipient to $89m in net institutional inflow over the seven weeks, whilst being SGX’s fifth most-traded stock overall.

This comes after the agribusiness group posted an 18.6% increase in its FY2020 net profit to US$1.53b on the back of a robust performance across all core segments.

“Recent years have seen Wilmar establish a comprehensive sales and distribution network reaching traditional retail outlets, supermarkets, convenience stores and hyper-marts, reaching about five billion consumers worldwide,” the report stated.

OCBC Investment Research (OIR) analyst Chu Peng remains positive on Wilmar given that the listing of its owned subsidiary Yihai Kerry Arawana Holdings (YKA) provides long-term benefits for the group as they can further penetrate into China.

“We believe Wilmar’s valuations are likely to be lifted over time with sustained YKA’s valuations and we remain positive on Wilmar,” Chu said.

OIR has given Wilmar a “buy” recommendation with a fair value of $6.16.