PPB Group: Neutral Outlook Amid Wilmar Subsidiary’s Indonesian Sugar Import Charges

KUALA LUMPUR: PPB Group Bhd’s Neutral call maintained and target price of RM11.02 despite its associate, Wilmar International Ltd, facing legal challenges in Indonesia, analysts from MBSB Research say.

Wilmar’s subsidiary, P.T. Duta Sugar International (DSI), has been charged alongside eight other sugar refiners for alleged irregularities in 2016 raw sugar imports. Indonesian prosecutors claim the imports caused state losses of IDR578 billion (USD36 million). DSI has denied wrongdoing, asserting that all actions were carried out under directives from the then Minister of Trade, Thomas Lembong.

PPB Group

Each company was required to place a security deposit, with DSI contributing IDR41.23 billion (USD2.5 million). PPB’s indirect exposure to potential losses is about RM1.8 million, or 0.23% of forecast earnings.

Analysts believe the impact is not material and that short-term risks are already priced in. PPB’s FY2025 dividend forecast remains at 25 sen per share, yielding 2.3%.

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