IndoFood and Wilmar
1.2 Overview of Companies
1.2.1 IndoFood Agri Resources
Indofood Agri Resources is a subsidiary of Indofood Singapore Holdings Pte. Ltd. Headquartered in Singapore, it is one of the most vertically integrated and diversified plantation companies. Its principal activities include the cultivation and milling of oil palm, sugar canes, and rubber plantations in Indonesia and the production, refining, and marketing of palm oil derivative products. Its primary markets include Indonesia, the United States, China, the Netherlands, Singapore, and India.
1.2.2Wilmar International
Headquartered in Singapore, Wilmar stands out as Asia’s leading agribusiness group and is one of the largest listed companies by market capitalisation on the Singapore Exchange. Its business activities include oil palm cultivation, edible oils refining, and consumer pack edible oils and grains processing and merchandising. It has operations in over 20 countries, focusing on Indonesia, Malaysia, China, India, and Europe.
Both IndoAgri and Wilmar have ROE ratios that are slightly above the industry average, thus showing that they are managing investors’ capital well to generate profits. These surplus returns can be reinvested to improve their business operations without a need to raise new capital.
IndoAgri has a relatively high ROA ratio which is very close to its ROE ratio, showing that it uses very little debt. Hence, it will be a stable investment even during economic crises as there is no debt to repay. However, Wilmar has a ROA ratio significantly lesser than its ROE ratio, showing its utilisation of financial leveraging in its business using debts. The higher-than-industry ROA ratios imply that both companies are efficient in using their investments to generate earnings.
The high P/E ratios for both IndoAgri and Wilmar show investor confidence as investors expect these companies to have higher earnings growth in the future.
The high share price of Wilmar shows that
1.2.1 IndoFood Agri Resources
Indofood Agri Resources is a subsidiary of Indofood Singapore Holdings Pte. Ltd. Headquartered in Singapore, it is one of the most vertically integrated and diversified plantation companies. Its principal activities include the cultivation and milling of oil palm, sugar canes, and rubber plantations in Indonesia and the production, refining, and marketing of palm oil derivative products. Its primary markets include Indonesia, the United States, China, the Netherlands, Singapore, and India.
1.2.2Wilmar International
Headquartered in Singapore, Wilmar stands out as Asia’s leading agribusiness group and is one of the largest listed companies by market capitalisation on the Singapore Exchange. Its business activities include oil palm cultivation, edible oils refining, and consumer pack edible oils and grains processing and merchandising. It has operations in over 20 countries, focusing on Indonesia, Malaysia, China, India, and Europe.
Both IndoAgri and Wilmar have ROE ratios that are slightly above the industry average, thus showing that they are managing investors’ capital well to generate profits. These surplus returns can be reinvested to improve their business operations without a need to raise new capital.
IndoAgri has a relatively high ROA ratio which is very close to its ROE ratio, showing that it uses very little debt. Hence, it will be a stable investment even during economic crises as there is no debt to repay. However, Wilmar has a ROA ratio significantly lesser than its ROE ratio, showing its utilisation of financial leveraging in its business using debts. The higher-than-industry ROA ratios imply that both companies are efficient in using their investments to generate earnings.
The high P/E ratios for both IndoAgri and Wilmar show investor confidence as investors expect these companies to have higher earnings growth in the future.
The high share price of Wilmar shows that