Wilmar International - China Operation to List in HK within six month

To list China Operation in HK. For 2008, China operation generated about US$600m net profit. Based on China's consumer listed PE of 15x, this will translate into a potential market cap of US$ 9.0b. Management intent to float 20-30% to the market, which will bring in cash proceed of US$1.8b to US$2.7b.

Listing rationale:
o Unlock shareholder value
o Strategic to have Chinese investors participate in growth

Targeting to be listed in HK within 6 months. Eventually will be doing a dualisting or move to Shanghai for listing within the next 2 to 3 years.

CPO price outlook steady with small correction in 2H due to higher production. No big correction is expected due to
o Better macro outlook for India and China ? the two key market for palm oil
o Stable crude oil price ? provide a proxy to edible oil
o Tightness in oilseed and edible oil supply ? Indonesian palm oil supply could be lower due to bad weather in 1Q in selective areas. These areas down by 40% yoy in 1Q09.

2009 still betting on volume growth. Strong refinery's margin and consumer pack's margin unlikely to sustain due to the higher raw material cost. But still well supported by volume growth of 10-15% for 2009.

Reviewing price target with an upside of 15-20% from our current pricetarget of S$3.80 on (1) higher CPO price assumption for 2009 and (2) betterrefinery and crushing margins. Potential special dividend from HK IPOproceed will be another share price catalyst.

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