[ET Net News Agency, 19 October 2020] Goldman Sachs lowered its target price for WH
Group (00288) to HK$9.9 from HK$10 and maintained its "buy" rating.
The research house expects a 2% decline in group operating profit (OP) for 3Q, and this
is driven by an 18% increase in China OP, offset by US/International's 26% decline.
Goldman expects the US business to see sequentially better earnings as 3Q's Covid-19
related expenses are much less versus 2Q's US$350mn.
With better slaughtering volume (above 90% utilization now) and recovering foodservice
channel, Goldman expects a solid result from the US fresh pork and packaged meat segment,
partially offsetting the hog production losses. The recent rally of hog prices indicate a
better result for 4Q if the trend persists
Goldman revised it estimates for 2020-22 by 1%/-2%/-3% respectively, mainly to account
for a slightly weaker China packaged meat demand growth and better US business in 3Q. (KL)