Wilmar International, the world’s biggest palm oil trader, surged to a record in Singapore trading after UOB Kay Hian Holdings and UBS AG increased their share-price estimates on optimism of growth from China.
Wilmar rose 5.1% to close at $5.77, the highest since it started trading in July 2000. The stock has more than doubled this year.
UOB Kay Hian raised its share-price target for Wilmar to $6.50 from $4.80 and maintained its “buy” rating. UBS AG resumed coverage of Wilmar on July 22 with a “buy” rating and a share-price target of $7.
“Wilmar can look forward to growing sales and a potentially bigger market share in China,” UOB Kay Hian wrote in a note dated yesterday. Wilmar gets 60% of its net income from China, according to UOB Kay Hian.
China’s economic growth accelerated to 7.9% in the second quarter, making it the first of the major economies to rebound from the global recession. Wilmar is planning to list its China subsidiary in Hong Kong, the South China Morning Post reported on July 20, citing a person it didn’t identify.
The China subsidiary, which makes cooking oil, is expected to raise between US$3 billion ($4.33 billion) and US$4 billion through its initial public offering in the first half of next year, the newspaper said.