Morgan Stanley: Maintains "overweight" rating on WH Group (00288) with a target price of HK$7.5.

Morgan Stanley released a research report stating that they are resuming coverage of WH GROUP (00288) with a "buy" rating and a target price of 7.5 Hong Kong dollars. WH GROUP is shifting its strategy towards improving the profitability of its various business segments to mitigate the fluctuations in the main market commodities cycle. Improving profit margins is the focus for this year. Morgan Stanley pointed out that WH Group is streamlining its US pork production capacity to move towards a healthier upstream business, while the focus for packaged meat will be further improving pricing and cost control for the US business. Despite pressure from inflation on demand, the profitability of packaged meats is expected to improve year-on-year in the fourth quarter of last year, thanks to cost controls and higher average selling prices. With relatively stable demand, the company will continue to focus on pricing and cost control in order to achieve stable growth in this business segment this year.