For 9M26, WH Group posted total revenue/operating profit/attributable net profit (before biological fair value adjustments) of USD20.61/1.70/1.02bn (+0.6/-11.9/-12.9% YoY). For 3Q26, total revenue/operating profit/attributable net profit (before adjustments) were USD6.78/0.47/0.24bn (-4.3/-30.3/-44.9% YoY). Revenue remained largely flat in 9M26 while profit weakened sequentially across quarters, which we attribute primarily to concurrent hog price declines across all three regions weighing on upstream operations, alongside soft downstream demand in China and the US dragging on the packaged meats business. For full-year 2026, we believe falling hog prices across the three regions will pose near-term headwinds to earnings; looking ahead to 2027 and 2028, however, cyclical hog price dynamics are poised to improve at the margin, offering earnings recovery upside. Maintain BUY.
Revenue: China operations boosted by favorable FX rates
1) China (34% of 3Q26 revenue): For 3Q26, revenue was USD2.28bn (-0.2% YoY). Specifically, packaged meats revenue rose by 5.5% YoY to USD990mn on stable volume and higher prices, driven by scaling in new retail and other non-traditional channels (9M26 sales volume up over 40% YoY, accounting for over 25% of volume) and favorable FX translation. Pork segment (slaughtering and hog production) revenue fell by 9.5% YoY to USD880mn in 3Q26; while fresh pork sales volume/hog shipments grew by 5/24% YoY, volume gains were insufficient to fully offset lower ASPs resulting from falling market hog prices. 2) North America (49% of 3Q26 revenue): For 3Q26, revenue was USD3.33bn (-9.3% YoY). Specifically, packaged meats revenue declined by 5.2% YoY to USD1.98bn on stable volume and lower prices, as soft consumer demand weighed on pricing. Pork segment revenue dropped by 15.0% YoY to USD1.34bn, dragged down by lower hog prices as slaughtering saw both volume and price declines while hog production recorded stable volume but lower prices in 3Q26. 3) Europe (17% of 3Q26 revenue): For 3Q26, revenue was USD1.17bn (+3.3% YoY). Specifically, packaged meats revenue climbed by 14.5% YoY to USD640mn on higher volume and prices, whereas pork segment revenue fell by 16.6% YoY to USD260mn mainly as European hog prices remained low YoY.
Earnings forecasts and valuation
Given near-term operational headwinds from hog cycles across the three regions, we trim our 2026/2027/2028 attributable net profit forecasts to USD1.31/1.48/1.54bn (-16.7/+13.6/+4.1% YoY), corresponding to 2026/2027/2028 EPS of USD0.10/0.12/0.12 (cut by 23/8/14% from our previous forecasts). Based on our SOTP valuation, and considering heightened earnings volatility at Shuanghui and Smithfield alongside rising uncertainty across the cross-regional asset portfolio, we widen our holding company discount to peers' valuation to 25% (previous: 20%). We value the stock at 11x 2027E PE, yielding a target price of HKD10.30 (previous: HKD11.76, based on 12x 2026E PE). Maintain BUY.
Risks: intensifying competition, weaker-than-expected macroeconomic performance, food safety issues.