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WH Group Limited (HK:0288)
:0288

WH Group (0288) AI Stock Analysis

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HK

WH Group

(OTC:0288)

Rating:75Outperform
Price Target:
WH Group Limited demonstrates strong financial stability with robust profitability and cash flow metrics, which significantly contribute to the score. The stock's attractive valuation, characterized by a low P/E ratio and high dividend yield, further enhances its appeal. While technical indicators show bullish momentum, caution is advised due to overbought signals.
Positive Factors
Corporate Strategy
The spin-off of Smithfield should help unlock WH Group’s value and financially support European M&As and improving shareholder returns.
Earnings
Operating profit increased driven mainly by the profit turnaround in the US pork segment.
Product Strategy
WH Group is targeting to raise volume sales of packaged meat products in China, rolling out more affordable products and refining sales operations, showing early signs of success.
Negative Factors
Market Competition
Europe delivered robust performance in 2024, with slaughtering profits improving in 4Q24 amid lower hog prices, supporting overall pork business earnings growth, which could intensify competitive pressures.
Packaged Meat Sales
WH Group is targeting to raise volume sales of packaged meat products in China after a 6% decline in 2024.

WH Group (0288) vs. iShares MSCI Hong Kong ETF (EWH)

WH Group Business Overview & Revenue Model

Company DescriptionWH Group Limited, an investment holding company, engages in the production, wholesale, and retail sale of meat products in China, the United States, Mexico, and Europe. The company operates through Packaged Meats, Pork, and Others segments. It is also involved in the slaughtering, wholesale, and retail sale of fresh and frozen pork; and hog farming activities. In addition, the company engages in the manufacture and sale of packaging materials; provision of logistics services; operation of a chain of retail food stores; production of flavoring ingredients and natural casings; and sale of biological pharmaceutical materials. Further, it is involved in the livestock breeding and slaughtering; and finance and property development activities. The company was formerly known as Shuanghui International Holdings Limited and changed its name to WH Group Limited in January 2014. The company was founded in 1958 and is headquartered in Kowloon, Hong Kong.
How the Company Makes MoneyWH Group Limited generates revenue primarily through three key segments: packaged meats, fresh pork, and hog production. The packaged meats segment includes sales of processed meat products such as sausages, hams, and bacon, which are a major source of income due to their higher margins and brand recognition. The fresh pork segment involves the sale of fresh pork products to retail, foodservice, and wholesale customers, capitalizing on global demand for fresh meat. The hog production segment includes the breeding and raising of hogs, with sales primarily to the company's own processing operations, ensuring a consistent supply chain. Additionally, WH Group benefits from international trade and strategic acquisitions, enhancing its market presence and revenue streams.

WH Group Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q3-2024)
|
% Change Since: 16.08%|
Next Earnings Date:Aug 19, 2025
Earnings Call Sentiment Neutral
The earnings call reflected significant profit growth and improvements in North America and Europe, countered by declines in sales volume and revenue, particularly in China. Despite challenges, strategic cost management and market adjustments in the U.S. drove substantial profitability gains.
Q3-2024 Updates
Positive Updates
Significant Profit Growth
EBITDA increased by 38.9% to $2.25 billion, operating profit increased by 71% to $1.79 billion, and profit attributable to owners increased by 90% to $1.0 billion compared to last year.
Strong North America Performance
Operating profit in North America increased by 589% to $841 million, with packaged meats profit increasing by 11.6% and pork business turning from a loss to a profit.
European Business Growth
Operating profit in Europe increased by 64.2% to $225 million, with packaged meats' operating profit up 50% and pork business profit up 64% compared to last year.
Improved Cost Structure in U.S. Hog Production
U.S. hog production turned profitable with a cost reduction of 30% in feed costs, driven by genetic improvements and better health management.
Negative Updates
Decline in Packaged Meats and Pork Volume
Packaged meats sold declined by 4.4% and pork sold volume decreased by 7.6% year-over-year.
Revenue Decline
Total revenue decreased by 3.2% to USD 18.8 billion year-over-year.
Challenges in China's Pork Business
Operating profit in China's pork business declined by 30.5% year-over-year.
Volume Decrease in U.S. Packaged Meats
Volume slowdown driven by high food inflation and reduction in government support programs.
Company Guidance
During the Q3 2024 earnings call for WH Group, the company reported a total revenue of USD 18.8 billion, marking a year-over-year decline of 3.2%. Despite this, significant improvements were noted in profitability metrics: EBITDA increased by 38.9% to $2.25 billion, operating profit surged by 71% to $1.79 billion, and profit attributable to owners rose by 90% to $1.0 billion. Basic EPS also saw a 90% improvement, reaching $8.43. The packaged meats segment contributed 52.5% to the revenue and a substantial 93.8% to the operating profit, while the pork business accounted for 40.1% of revenue and 12.3% of operating profit. Regionally, North America was the main revenue generator with 52.5%, followed by China at 33%, and Europe at 14.5%. The call also highlighted market dynamics, such as rising hog prices in China and declining hog prices in Europe. Looking forward, WH Group plans to maintain its market position by optimizing operations, enhancing cost management, and leveraging its diversified business model across various regions.

WH Group Financial Statement Overview

Summary
WH Group Limited shows a stable financial position with strong profitability and cash flow metrics. While revenue growth has been inconsistent, the company has managed to improve its profitability and cash generation. The balance sheet is solid with manageable leverage and strong equity, indicating a well-balanced financial structure.
Income Statement
70
Positive
The company exhibits a solid gross profit margin, consistently around 20% over the years, indicating strong pricing power and cost management. The net profit margin shows improvement from 2.4% in 2023 to 6.2% in 2024, suggesting better operational efficiency. Revenue growth has been inconsistent, with a decline observed in 2023 and 2024 compared to 2022. EBIT and EBITDA margins have shown fluctuations but are relatively strong, reflecting stable core operations.
Balance Sheet
75
Positive
The debt-to-equity ratio is moderate, improving from 0.38 in 2023 to 0.35 in 2024, indicating controlled leverage and financial stability. The return on equity improved significantly from 6.4% to 15.1%, showcasing enhanced profitability and efficiency. The equity ratio is robust, consistently above 50%, reflecting a healthy balance between debt and equity financing.
Cash Flow
80
Positive
The company demonstrates robust cash flow management with a strong free cash flow growth rate of 125% in 2024. The operating cash flow to net income ratio is healthy, highlighting efficient cash generation relative to profits. Free cash flow to net income also underscores strong cash flow conversion, indicating effective capital expenditure management and cash generation capabilities.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
25.94B26.24B28.14B27.29B25.59B
Gross Profit
5.37B3.46B5.18B4.54B3.85B
EBIT
2.42B385.00M1.79B1.70B1.06B
EBITDA
3.16B2.00B3.10B2.25B1.57B
Net Income Common Stockholders
1.61B629.00M1.37B1.07B828.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.54B1.71B1.54B1.79B2.48B
Total Assets
19.84B19.18B19.86B19.41B18.71B
Total Debt
3.72B3.72B3.90B4.50B3.16B
Net Debt
1.67B2.56B2.51B2.94B1.56B
Total Liabilities
8.48B8.60B9.44B9.72B7.73B
Stockholders Equity
10.66B9.83B9.60B8.75B10.01B
Cash FlowFree Cash Flow
1.81B805.00M826.00M1.04B1.80B
Operating Cash Flow
2.52B1.62B1.80B1.96B2.36B
Investing Cash Flow
-612.00M-663.00M-350.00M-409.00M-963.00M
Financing Cash Flow
-984.00M-1.18B-1.54B-1.57B-479.00M

WH Group Technical Analysis

Technical Analysis Sentiment
Positive
Last Price7.56
Price Trends
50DMA
6.81
Positive
100DMA
6.37
Positive
200DMA
5.95
Positive
Market Momentum
MACD
0.23
Negative
RSI
75.42
Negative
STOCH
66.60
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0288, the sentiment is Positive. The current price of 7.56 is above the 20-day moving average (MA) of 7.24, above the 50-day MA of 6.81, and above the 200-day MA of 5.95, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 75.42 is Negative, neither overbought nor oversold. The STOCH value of 66.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0288.

WH Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$97.00B7.7115.73%21.46%-1.46%155.31%
65
Neutral
$8.81B15.014.71%3.72%3.60%-2.89%
$121.21M15.381.74%
DE3DS
€70.73M23.600.92%
HK$2.96B9.708.88%
71
Outperform
HK$7.25B37.575.15%2.31%3.95%-42.81%
62
Neutral
HK$7.33B12.565.82%38.41%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:0288
WH Group
7.56
2.82
59.53%
QQFSF
Qinqin Foodstuffs Group (Cayman) Company
0.06
-0.01
-14.29%
DE:3DS
Dachan Food (Asia) Limited
0.06
<0.01
20.00%
HK:9977
Shandong Fengxiang Co., Ltd. Class H
1.87
0.35
23.03%
HK:1475
Nissin Foods Co., Ltd.
6.92
2.08
42.98%
HK:1610
COFCO Joycome Foods Limited
1.60
-0.19
-10.61%

WH Group Corporate Events

WH Group Announces Successful AGM Resolutions and Dividend Declaration
May 9, 2025

WH Group Limited announced that all resolutions proposed at their Annual General Meeting on May 9, 2025, were passed. Key resolutions included the adoption of financial statements, re-election of executive directors, reappointment of Ernst & Young as auditors, and the declaration of a final dividend of HK$0.40 per share. These decisions reflect the company’s stable governance and commitment to shareholder returns, potentially strengthening its market position and investor confidence.

WH Group’s Shuanghui Reports Decline in Q1 2025 Financial Performance
Apr 29, 2025

Henan Shuanghui Investment & Development Co., Ltd., a subsidiary of WH Group Limited, reported a decrease in its financial performance for the first quarter of 2025. The company’s external sales volume of meat products fell by 1.9%, total operating income slightly declined by 0.1% to RMB14,295 million, and net profit attributable to owners decreased by 10.6% to RMB1,137 million compared to the same period in 2024. These results reflect a challenging market environment and may impact WH Group’s overall financial outlook.

Smithfield Foods Reports Strong Q1 2025 Financial Results
Apr 29, 2025

Smithfield Foods, a subsidiary of WH Group Limited, reported its unaudited financial results for the first quarter of 2025, showing a notable increase in sales and net income compared to the previous year. The report highlights a strong operational performance with a significant rise in operating profit, suggesting a positive impact on the company’s market positioning and potential benefits for stakeholders.

WH Group Reports Strong Q1 2025 Financial Results Amid Market Challenges
Apr 29, 2025

WH Group Limited announced its unaudited quarterly results for the first quarter of 2025, highlighting a 6% increase in revenue and a 19.4% rise in operating profit compared to the previous year. Despite a 9.2% decrease in packaged meats sales volume, pork sales volume increased by 4.4%, contributing to the overall financial growth. The company’s performance was impacted by varying hog and pork prices across different regions, with significant price increases in China and the U.S., while Europe faced challenges due to an outbreak of foot and mouth disease.

WH Group Limited Announces 2025 Annual General Meeting Agenda
Apr 15, 2025

WH Group Limited has announced its upcoming annual general meeting scheduled for May 9, 2025, in Hong Kong. Key agenda items include the adoption of financial statements for 2024, re-election of executive directors, approval of director remuneration, re-appointment of Ernst & Young as auditors, and the declaration of a final dividend of HK$0.40 per share. Additionally, the meeting will consider granting the board mandates to repurchase shares and issue new shares, which could impact the company’s market operations and shareholder value.

WH Group Completes Smithfield Shares Transfer and Cash Distribution
Apr 9, 2025

WH Group Limited has announced the successful transfer of Smithfield shares and the dispatch of cash payments to shareholders as part of a distribution in specie. The company has distributed approximately HK$211 million in cash payments to shareholders who opted for this form of distribution, reflecting its commitment to returning value to its investors.

WH Group Schedules Board Meeting to Review Q1 2025 Results
Apr 3, 2025

WH Group Limited has announced a board meeting scheduled for April 29, 2025, to consider and approve the unaudited consolidated results for the first quarter of 2025. This meeting is significant as it will provide insights into the company’s financial performance and strategic direction, potentially impacting its market positioning and stakeholder interests.

WH Group Limited Reports 2024 Annual Results with Increased Profitability
Mar 25, 2025

WH Group Limited announced its annual results for the year ended December 31, 2024, reporting a decrease in sales volume for packaged meats and pork by 3.0% and 4.9% respectively, and a 1.1% decrease in revenue. Despite these declines, the company saw a significant increase in operating profit by 63.4% and a 142.7% rise in profit attributable to owners before biological fair value adjustments. The company declared a special dividend of HK$0.18 per share in addition to interim and final dividends. This financial performance highlights WH Group’s strong operational efficiency and strategic positioning in the global pork market, particularly in China and North America, despite challenges in sales volume.

WH Group Limited Announces Board Composition and Roles
Mar 25, 2025

WH Group Limited, a company incorporated in the Cayman Islands, has announced the composition of its board of directors and their respective roles within the organization. The board consists of executive directors, non-executive directors, and independent non-executive directors, with various members serving on six established committees, including Audit, Remuneration, Nomination, Environmental, Social and Governance, Food Safety, and Risk Management. This announcement highlights the company’s governance structure and the roles of key personnel, which may influence its strategic direction and operational focus.

WH Group Limited Establishes Nomination Committee Terms of Reference
Mar 25, 2025

WH Group Limited has adopted the terms of reference for its Nomination Committee, which will consist of at least three members, primarily independent non-executive directors. The committee is tasked with reviewing, assessing, and making recommendations on relevant issues, and is authorized to seek independent professional advice if necessary. This move is aligned with the company’s commitment to corporate governance and compliance with the Hong Kong Stock Exchange’s listing rules.

Smithfield Foods Reports Strong Financial Turnaround in 2024
Mar 25, 2025

Smithfield Foods, Inc., majority-owned by WH Group Limited, released its audited financial results for the year ending December 29, 2024. The report highlights a significant improvement in profitability with a net income from continuing operations of $798 million, compared to a loss of $133 million the previous year. This financial turnaround is attributed to a reduction in costs and improved operational efficiency, positioning Smithfield more robustly in the market. The results, prepared under U.S. accounting standards, differ from WH Group’s consolidated financial statements due to adjustments for IFRS compliance.

WH Group’s Subsidiary Shuanghui Development Reports Decline in 2024 Financial Results
Mar 25, 2025

Henan Shuanghui Investment & Development Co., Ltd., a subsidiary of WH Group Limited, reported a slight decline in its financial performance for the year ended December 31, 2024. The company’s external sales volume of meat products decreased by 1.7%, and its total operating income fell by 0.6% to RMB59,715 million. Net profit also saw a decrease of 0.9% to RMB5,055 million. These results reflect a challenging market environment and may impact WH Group’s overall financial performance, given its substantial stake in Shuanghui Development.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.