WH Group Ltd
The global appetite for pork will grow with populations and incomes. But WH Group, the world's biggest pork company, faces a new threat...
Investment thesis
The global appetite for pork will grow with populations and incomes. But WH Group, the world's biggest pork company, faces a new threat—the rise of plant-based meat substitutes. They will navigate this shifting market, though. The shares have attractive 7% dividend and 23% buyback yields. I rate them a Buy as they offer a 119% upside and a 15% internal rate of return.
Stock summary
Company name: WH Group Ltd
Ticker: HKG:0288
52-week range: HK$3.90–6.40
Market cap: HK$64bn
Price: HK$4.60
Target: HK$7.30–12.30
Upside: +119%
Recommendation: Buy
1) Fundamentals and overview
Business model
WH Group is a global pork production and processing business. The company farms and buys pigs. It then kills and processes them into pork products which it sells. These items include fresh, packaged, and processed pork products like sausages and bacon. It also has a small plant-based meat substitute products division. The firm operates in China, the US, Europe and Mexico. It’s the largest pork produ…