Analyst Clement Xu of DBS maintained a Buy rating on WH Group (WHGRF – Research Report), retaining the price target of HK$8.70.
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Clement Xu has given his Buy rating due to a combination of factors that highlight WH Group’s strong financial performance and strategic initiatives. The company experienced a 6% year-over-year increase in revenue, reaching USD6.6 billion in the first quarter of 2025. This growth was primarily driven by higher slaughtering revenue, which compensated for the decline in packaged meat sales. Additionally, operating profit and attributable profit saw significant increases of 19% and 21% respectively, largely due to a turnaround in the US pork segment.
WH Group is also focusing on regaining market share in China by implementing strategies to boost sales of packaged meat products. These strategies include offering more affordable products, restructuring the salesforce, and expanding the client base. Furthermore, the company is benefiting from favorable conditions in the US, such as reduced hog farming capacity and favorable feed costs, which support profitability. The company’s global strategy emphasizes industrialization, diversification, and internationalization, which are expected to strengthen synergies across its operations in China, Europe, and the US. The stock is currently trading at an attractive valuation, and the potential listing of Smithfield could unlock further value.