BofA Securities: Cuts WH GROUP (00288) Target Price to HK$8.1, Maintains "Buy" Rating; Weak Quarterly Results Already Anticipated by Market

BofA Securities issued a research report stating that WH GROUP's (00288) third-quarter operating profit and net profit fell 30% and 45% year-on-year respectively, while for the first nine months they fell 12% and 13% year-on-year respectively. Third-quarter operating profit was broadly in line with market expectations, while net profit was below expectations. The bank believes that WH GROUP's weak third-quarter performance had long been anticipated by the market. BofA Securities reiterates its "Buy" rating and cuts its target price from HK$8.5 to HK$8.1. Taking into account the downward revision to U.S. business guidance, BofA Securities lowers WH GROUP's 2026 and 2027 earnings per share forecasts by 7% and 3% respectively, and expects 2026 net profit to fall 18% year-on-year to US$1.3 billion. The bank expects the earnings per share downtrend to persist through the first quarter of 2027, after which it may stabilize from the second quarter of 2027 onward, supported by low base effects in China and the U.S. The bank notes that WH GROUP's share price has fallen 22% cumulatively since the third quarter, which has already reflected earnings per share downside risk. The market views the stock as a dividend stock; based on the bank's prudent estimate, recurring dividend per share for 2026 is 50 HK cents, lower than 61 HK cents in 2025, corresponding to a payout ratio of approximately 63% and a dividend yield of approximately 8%, which is attractive.