Grease Your Portfolio with These Palm Oil Stocks from Singapore

Global Palm Oil – A Growing Market

The global palm oil market is expected to continue its growth over the next few years. According to recent estimates, the market is projected to display a CAGR (Compound Annual Growth Rate) of 4.04% over the forecast period of 2022-2032, reaching a value of around US $51 Billion.

The growth of the palm oil market is largely driven by the expansion of the food processing sector and the rising population in developing markets, which are increasing demand for palm oil. This growth is expected to continue, providing opportunities for companies operating in the palm oil market. 

Wilmar International and Golden Agri-Resources (aka “GAR”) are two leading companies in the global agriculture and food processing industry. Both companies are based in Singapore and have a significant presence in the Asian market, with operations spanning across multiple countries. These companies are expected to benefit from the continued growth of the palm oil market in 2022-2032. As such, investors may want to keep an eye on these companies and consider adding them to their portfolios. 

Wilmar International Limited

Wilmar International Limited (F34) is a leading agribusiness company based in Singapore. Founded in 1991, the company has grown to become one of the largest global players in the agriculture and food processing industry. Wilmar operates in more than 50 countries across Asia, Africa, Europe, and the Americas, and has a diverse portfolio of businesses including oil palm cultivation, edible oils refining, sugar milling and refining, specialty fats, oleochemicals, biodiesel, and fertilizers. 

Wilmar’s history can be traced back to 1991, when a group of entrepreneurs led by William Kuok Khoon Hong founded the company as a small palm oil trader. Over the next few decades, the company expanded rapidly through acquisitions and partnerships, building a strong presence in the global agriculture and food processing industry. Today, Wilmar is one of the world’s largest producers and marketers of palm oil, with a total planted area of more than 500,000 hectares. 

In addition to its core businesses in oil palm and edible oils, Wilmar also has a significant presence in the sugar, specialty fats, and oleochemicals industries. The company operates a network of more than 450 manufacturing plants and employs over 100,000 people worldwide.

Wilmar International – Financial Performance

In the last month, Khoon Hong Kuok, the founder, and chairman of Wilmar International, has purchased shares worth S$24 million of the company. This significant investment by Mr. Kuok shows his confidence in the prospects of Wilmar and his commitment to the company’s continued success. The purchase of these shares also solidifies his position as a major shareholder in the company.

Wilmar International has a market capitalization of S$19.16 billion and a price-to-earnings ratio of 8.3. This means that the company’s stock is currently trading at a relatively low valuation, compared to other companies in its industry. The low price-to-earnings ratio may indicate that the market is currently undervaluing the company, which could present a buying opportunity for investors who believe in Wilmar’s long-term growth prospects. 

Is Wilmar International a Good Buy Now?

Wilmar International has a consensus rating of Strong Buy, which is based on 5 Buy ratings, 1 Hold rating and 0 sell ratings. In the last month, Wilmar International Limited has received four Buy analyst ratings with an average price target of S$5.27. This represents a potential upside of 28.27% from the company’s current stock price.

These ratings indicate that analysts who have recently evaluated the company believe that its stock is undervalued and has potential for growth. The high number of Buy ratings and the relatively high average price target suggest that analysts have a positive outlook on the company’s prospects. 

Golden Agri-Resources

Golden Agri-Resources (E5H) (aka “GAR”) is a leading agribusiness company based in Singapore. It is one of the world’s largest palm oil plantation companies, with operations in Indonesia and China. The company was founded in 1987. 

GAR is involved in the entire palm oil value chain, from cultivating and harvesting palm oil trees, to processing and refining palm oil and palm kernel oil. The company also produces and sells a wide range of downstream palm oil products, including cooking oil, margarine, shortening, and biodiesel. 

The palm oil industry is a major contributor to the global economy, with palm oil being the most widely used edible oil in the world. However, the industry has faced criticism in recent years due to concerns over deforestation and environmental sustainability. In response, GAR has implemented several sustainability initiatives, including a commitment to zero deforestation and the responsible management of natural resources. 

GAR – Financial Performance

Golden Agri-Resources has a market capitalization of S$2.4 billion and a price-to-earnings ratio of 3.4. This means that the company’s stock is currently trading at a relatively low valuation, compared to other companies in its industry. The low price-to-earnings ratio may indicate that the market is currently undervaluing the company, which could present a buying opportunity for investors who believe in Golden Agri-Resources’ long-term growth prospects. 

Is Golden Agri-Resources a Good Buy?

In the last month, Golden Agri-Resources has received three analyst ratings. One rating is a Sell with a price target of S$0.27, one is a Hold with a price target of S$0.30, and the other is a Buy rating with a price target of S$0.35. The average of these three price targets is S$0.31, which represents a 21.61% upside from the company’s current stock price.

This suggests that, on average, analysts believe that the stock is undervalued and has potential for growth. However, the mixed opinions among analysts indicate that there is some disagreement about the company’s prospects and the analyst rating consensus is a Hold. This is based on the ratings of 3 Wall Street analysts. 

Conclusion: Wilmar International and Golden Agri-Resources Lead the Way

In conclusion, Wilmar International Limited and Golden Agri-Resources are two leading companies in the global agriculture and food processing industry. Despite operating in a challenging and highly competitive market, both companies have managed to achieve significant growth and success through a focus on sustainability and responsible business practices.

As the demand for food and agriculture products continues to grow, Wilmar and Golden Agri-Resources are well-positioned to capitalize on these trends and to continue to drive innovation and value creation in the global agriculture industry.