[ET Net News Agency, 29 April 2020] Goldman Sachs lowered its target price for WH Group
(00288) to HK$10.6 from HK$10.7 and maintained its "buy" rating.
The research house said WH Group reported a strong set of 1Q results. The solid 1Q China
margin and US hog production hedging gains are the main drivers for profit growth. Looking
forward, the US business faces more uncertainty in 2Q given the COVID-19 outbreak and
slaughtering/packaged meat plant closures.
However, China's business is seeing steady volume recovery and a sequentially stable
margin with the help of solid US import profits. Goldman believes most of the US's
potential slowdown will be offset by China's strength.
Goldman reduced the 2020 EPS forecast by 2% but maintained its 2021-22 EPS to reflect
the caution on US business. (KL)