[ET Net News Agency, 18 July 2018] Goldman Sachs cut its target price for WH Group
(00288) to HK$9.7 from HK$10.7, and reiterated its "buy" rating.
The research house said WH Group stock price has corrected 25% in the past two months on
US-China trade war concerns, and US upstream pressure from new capacity roll-out and
US-Mexico trade tariffs.
Although Goldman believes the US slaughtering business will continue to drag the segment
in 2Q, it expects a moderating decline versus 1Q and the strong China business to largely
offset the US drop.
Specifically, it looks for a 7% operating profit yoy decline for WH Group (US down 25%
and China up 18% yoy). Following the share price correction, it sees WH Group now trading
at an attractive 6.7x EV/EBITDA, 9% FCF and 6% dividend yield in 2018. (KL)