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00288 WH GROUP
RTNominal down6.330 -0.020 (-0.315%)
Research Report

12/08/2020 11:19

{I-bank focus}Daiwa lowers WH Group (00288) to HK$8.6; "buy"

[ET Net News Agency, 12 August 2020] Daiwa Research lowered its target price for WH
Group (00288) to HK$8.6 from HK$9.2 and reiterated its "buy" rating.
The research house said WH's 1H net profit rose by 19% to US$550m, versus an 80%
increase in 1Q and implying a 26% decline in 2Q. Management sees a further upside in the
operating margin in 2H and in the long term, if the hog cost declines, although a part
of the cost savings will be invested for brand-building. Daiwa believes pork imports from
the US may normalise in 2H versus 1H from a high base and narrowed pork price spread.
It expects the operating margin to decline in 2H from a high base and a slow recovery in
packaged meat sales. As such, Daiwa raised its 2020-22 revenue forecasts by 4-5% on higher
ASP assumptions in China, but lowered its 2020-22 EPS estimates by 5-22% due to more
COVID-19-related expenses in 2020 and fewer arbitrage benefits from the US/China pork
trade. (KL)

Remark: Real time quote last updated: 23/10/2020 17:59
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