[ET Net News Agency, 4 May 2020] Credit Suisse raised its target price for WH Group
(00288) to HK$10.9 from HK$10.7 and maintained its "outperform" rating.
The research house said WH Group's 1Q results were above market expectations. The key
earnings driver comes from the US business: (1) hog production turns to be profitable, and
(2) fresh pork operating profit margin improved, offsetting (3) packaged meat's 34%
decrease in operating profit.
Credit Suisse views the management's outlook as mixed. China business' momentum is
likely to continue in the rest of this year on the back of rising imports, price hike
benefit and sequential decrease in pork price, however, US business' uncertainty increases
due to the potential loss from the COVID-19 pandemic, partially offset by a rising pork
price on supply shortage.
Credit Suisse slightly increased its 2020-21 earnings estimates by 2-3%. (KL)