Ge Long Hui·2025-08-14 18:36Core Viewpoint - The company's 2Q25 financial results met market expectations, with revenue and operating profit showing positive growth, while core net profit experienced a decline due to previous government subsidies impacting year-over-year comparisons [1][2]. Financial Performance - 2Q25 revenue reached $6.833 billion, representing a year-over-year increase of 11.8% - Operating profit for 2Q25 was $661 million, up 3.4% year-over-year - Core net profit attributable to shareholders, excluding biological asset value changes, was $361 million, down 8.1% year-over-year; adjusting for a $87 million government subsidy in 2Q24, the core net profit would have increased by 18% year-over-year [1]. Development Trends China Region - The company anticipates a year-over-year increase in meat product sales for 2Q25, with significant growth in emerging channels - Sales growth is expected to improve quarter by quarter in the second half of the year, with slight increases in both annual sales and profit per ton - The company plans to increase slaughter volume and expand customer and outlet coverage, although profit margins may be pressured due to increased competition and market investments [1]. North America Region - In 2Q25, meat product sales showed slight year-over-year growth, maintaining high profit per ton levels - The company expects optimistic conditions for its pig farming business in the second half of the year, driven by rising pig prices and low feed costs - The subsidiary Smithfield has raised its full-year operating profit guidance for pig farming to between $0-100 million [1]. Profit Forecast and Valuation - The company maintains its net profit forecasts for 2025 and 2026, with the current stock price corresponding to 8.5 and 8.2 times the P/E ratios for 2025 and 2026, respectively - The target price has been raised by approximately 11% to HKD 9.5 per share, reflecting an upside potential of about 13.6% from the current stock price [2].