[ET Net News Agency, 4 June 2020] Citi Research said WH Group (00288) has been a
laggard in the China consumer sector in recent months. Its current share price implies a
negative valuation for its 100%-owned US biz & 85% stake in China logistics biz.
The research house said WH Group's management is optimistic about China biz in full-year
2020 and expects its strong operating profit growth of packaged meat biz to more than
offset possible operating profit decline in fresh pork biz.
According to management, the sales volume of China packaged meat biz reverted to
positive growth in 2Q (after 8% sales volume decline in 1Q). operating profit/tonne is
expected to maintain at a relatively high level in 2Q, thanks to its six rounds of ASP
hike in 2019 and trade-up of the sales mix.
Citi maintained its "buy" call on WH Group, with a target price of HK$9.91. (KL)