高盛：中国必需消费品-猪肉板块估值诱人，股东回报前景明朗

Investment Rating - The report initiates a Buy rating for WH Group with a 12-month target price (TP) of HK$8.6 per share, and a Neutral rating for Shuanghui with a TP of Rmb25.2 per share [4][25]. Core Insights - WH Group is the largest pork player globally, with a vertically integrated business model spanning hog production to packaged meat, and a significant presence in China, the US, and Europe [1][15]. - The company offers compelling shareholder returns with a dividend yield of 6%, one of the highest in the consumer staples sector, and potential share price upside of 26% [2][20]. - WH Group's operating profit (OP) is expected to grow at 6% year-on-year in 2025, driven by 4% growth in China, 7% in the US, and 10% in Europe, supported by favorable feed costs and ongoing operational efficiencies [2][24]. Summary by Sections Company Overview - WH Group operates a vertically integrated business model from hog production to packaged meat, with significant market shares in China (32% of sales), the US (53% of sales), and Europe (15% of sales) [1][15]. Financial Performance - The report anticipates WH Group's OP growth of 6% year-on-year in 2025, with specific growth rates of 4% in China, 7% in the US, and 10% in Europe, primarily due to stable hog prices and resilient packaged meat demand [2][24]. - The company is expected to maintain a strong cash flow, supporting its dividend payout ratio, with a forecasted free cash flow conversion rate of approximately 80% in 2026-27 [20][71]. Valuation - WH Group is valued attractively at 4x EV/EBITDA and 7x PE, with a potential re-rating opportunity as the US business stabilizes [3][25]. - The report highlights a significant valuation gap, with WH Group's current trading value reflecting only 40%-50% of the proportionate Smithfield Foods (SFD) market cap [3][27]. Market Dynamics - The report identifies three key themes affecting WH Group: the pork cycle, competition dynamics, and operating efficiency, with a focus on the company's leading market share and comprehensive product portfolio [16][17]. - Shuanghui, as the largest processed packaged meat player in China, is expected to maintain defensiveness amid pork cycles, with a track record of passing through inflation during hog upcycles [5][12]. Growth Outlook - The report projects a small decline in packaged meat OP in China, offset by growth in fresh meat OP, with expectations of breakeven in hog and poultry production [24][23]. - The US business is anticipated to recover from losses in 2024 to profits in 2025, while Europe is expected to see a 10% growth driven by acquisitions and favorable market conditions [24][25].