智通财经网·2025-05-06 01:45Core Viewpoint - CICC maintains a positive outlook on WH Group (00288), projecting net profit attributable to shareholders of $1.614 billion and $1.683 billion for 2025 and 2026 respectively, with a target price of HKD 8.56 per share, indicating approximately 23.9% upside potential from the current stock price [1] Group 1: Financial Performance - In Q1 2025, WH Group's revenue reached $6.554 billion, a year-on-year increase of 6.0%, while operating profit was $598 million, up 19.4% year-on-year, and core net profit attributable to shareholders was $364 million, reflecting a 20.9% increase year-on-year [2] - The profit performance in Q1 2025 slightly exceeded market expectations, primarily due to improved profitability in the U.S. farming business [2] Group 2: Domestic Business - In Q1 2025, the sales volume of meat products in the domestic market decreased by nearly 17.4%, with a profit per ton of approximately RMB 4,700, down 5.2% year-on-year [3] - Slaughtering volume in Q1 2025 increased by 11.8% year-on-year, with average profit per head rising by 11.6%, attributed to an increase in customer base and network coverage, alongside reduced competition [3] - The company's other segments, which include farming, saw a reduction in losses by RMB 140 million year-on-year, mainly due to improved controllable cost indicators in farming [3] Group 3: U.S. Business - In Q1 2025, the operating profit for meat products in the U.S. declined by 7.7%, with sales volume down approximately 3.7%, and profit per ton at $894, a decrease of 4.2% year-on-year, attributed to rising raw material costs and a delay in Easter [4] - The upstream farming business in the U.S. reported a profit of $17 million in Q1 2025, a significant improvement from a loss of $170 million in the same period last year, driven by rising hog prices [4] - Slaughtering profit contribution in Q1 2025 decreased by 27% year-on-year, as the increase in hog prices was less than the rise in live hog prices [4] Group 4: Outlook for 2025 - For domestic operations, the slaughtering business is expected to continue expanding its customer base and increasing slaughter volume, with further improvements in profitability for farming operations anticipated [5] - The meat products segment is projected to see improved sales starting from Q2 2025 as channel adjustments stabilize and inventory levels recover [5] - In the U.S., meat product profitability is expected to remain stable despite rising hog prices, as the company can pass on costs through pricing formulas and efficiency optimizations, with robust demand for meat protein [5]