UBS: Cuts WH GROUP (00288) target price by 4.8% to HK$8, maintains "Buy" rating

UBS Group AG released a research report stating that it has cut the target price for WH GROUP (00288) by 4.8%, from HK$8.4 to HK$8, while maintaining a "Buy" rating. The bank lowered its earnings per share forecasts for the company for 2026 to 2028 by 2%-6%, mainly reflecting a more cautious outlook for the profitability of its U.S. hog farming business. WH GROUP's third-quarter sales, operating profit and net profit before biological fair value adjustments fell by 4%, 30% and 45% year on year to US$6.783 billion, US$465 million and US$244 million, respectively, in line with the bank's expectations. By region, North America and Europe performed weakly, with operating profit down 53% and 39% year on year, respectively; the China market was relatively stable, with operating profit down 4% year on year. By business segment, hog farming and slaughtering dragged on overall performance, while the meat products business remained relatively resilient. Its subsidiary Smithfield (SFD.US) cut its fiscal 2026 North America operating profit guidance from US$1.225 billion to US$1.375 billion to US$900 million to US$1 billion. The original text noted that the adjustment mainly reflects the impact of hog products and pork-related factors, while the meat products business remains stable. Management attributed the lowered outlook to lower commodity prices and a more cautious U.S. consumer environment. WH GROUP management reiterated its commitment to a dividend payout ratio of at least 50% and emphasized its dedication to maintaining stable shareholder returns.