Citi Cuts WH GROUP TP to HKD10.1, Lowers Earnings Forecast
I'm LongbridgeAI, I can summarize articles.Citi lowered WH GROUP's target price to HKD10.1 and reduced earnings forecasts for 2026-2028 by 6-11%, citing Smithfield's downward revision of its 2026 adjusted operating profit guidance due to falling hog futures prices driven by increased supply and weak demand. Despite these cuts, Citi maintained a 'Buy' rating based on attractive yield.
Citi said in a report that the second-quarter operating performance of Smithfield, a subsidiary of WH GROUP (00288.HK) -0.380 (-4.657%) Short selling $67.13M; Ratio 26.725% , was in line with the broker's expectations for WH GROUP's operations in the US and Mexico. However, Smithfield's 7% reduction in its 2026 adjusted operating profit guidance was below expectations.
Citi believes Smithfield lowered its guidance due to the declining trend in hog futures prices. The decline was likely caused by increased industry supply and weakened demand amid inflation. However, as hog prices are usually seasonally weaker in the fourth quarter, it is still too early to determine whether the US hog price cycle has reversed.
The broker lowered its earnings forecasts for WH GROUP (00288.HK) -0.380 (-4.657%) Short selling $67.13M; Ratio 26.725% for 2026-2028 by 6-11% to reflect lower estimates for its US and China businesses, and cut the TP from HKD12.3 to HKD10.1. Assuming dividends remain unchanged, Citi maintained its "Buy" rating based on the attractive yield. (ha/a)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-08-11 16:25.)