Profile
Previous Close Price
Key Statistics
| Dec USD mn | 2024 | 2025f | 2026f |
|---|---|---|---|
| Revenue | 25,941 | 28,208 | 28,385 |
| Net Profit | 1,471 | 1,605 | 1,681 |
| Profit Gth (%) | 142.7 | 9.1 | 4.7 |
| PE (X) | 6.8 | 7.6 | 7.2 |
| Div Yield (%) | 11.2 | 7.7 | 6.9 |
| P/BV (X) | 0.9 | 0.9 | 0.8 |
Recent Developments
Our Views
Volume growth in China. We believe the current low hog prices in China should provide WH Group with greater flexibility to roll out more affordable packaged meat products and drive sales volume, supporting mid-single-digit growth in 4Q25 as marketing and promotion efforts step up. Full-year profit per tonne should stay stable at a record-high annual level of c.RMB4,700 (3Q25 alone: RMB5,000+) and remain firm into 2026. Backed by specialised sales teams for channel expansion, WH Group is well positioned to achieve its mid-single-digit volume growth target next year, including 30–35% growth in new channels and recovery in traditional ones. The fresh pork segment is expected to follow a similar strategy with potentially faster volume growth, while the hog division, though loss-making in 2025, may return to profit in 2026 amid continued cost reductions.
Margin recovery in the US. WH Group continues to navigate the commodity cycle with disciplined execution. Support from higher hog prices could extend into 1H26, while Smithfield has raised its full-year 2025 operating profit guidance to USD1.225–1.325bn (midpoint up 2%). Although input costs for packaged meats such as bellies remain elevated (+16% y/y vs. +6% in ASP), we expect sequential margin recovery ahead as management implements further price increases and enhances product mix. We believe the company’s diverse branded and private-label portfolio in the US (c.40% of retail sales) should help retain consumers trading down, while ongoing supply chain efficiencies and SG&A savings should further support margin recovery.
European growth opportunities. In Europe, WH Group is pursuing long-term growth by focusing on high-margin, fast-growing categories such as ready-to-eat meals and convenience poultry. Management also targets strategic M&As to fill portfolio gaps, with a priority on pan-European brands, and sales volume likely to exceed 400k tons this year. Despite near-term margin pressure from low pork prices, we see long-term potential for WH Group to narrow the per-tonne profit gap with its US and China divisions through product mix upgrades and operational improvements.
Maintain BUY, TP HKD9.60 unchanged. Our TP of HKD9.60 is based on SOTP valuation, valuing China and US operations at 13x/11x 12-month forward P/E. We expect China to deliver sequential sales improvement in 4Q25, while US margins could recover in the downstream. Maintain BUY on undemanding valuation (c.7x forward P/E) and attractive dividend yield of nearly 7%.
Risks
Valuation
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