On August 13, WH Group (00288.HK) saw its share price rise by more than 6%, reaching a record high of HKD 8.36, with its market capitalization surpassing HKD 100 billion. The previous evening, the company disclosed its interim results for the six months ended June 30, 2025: revenue of USD 13.387 billion (up 8.9% year-on-year), operating profit up 10.4% year-on-year, and adjusted profit attributable to shareholders of USD 725 million (up 4.5% year-on-year), with an interim dividend of HKD 0.20 per share.

Performance Overview: Revenue Reaches High Levels, Profit Increases Steadily

The company disclosed that revenue for the first half of the year was USD 13.387 billion, approaching historical highs, continuing the recovery driven by volume and price. EBITDA (earnings before interest, taxes, depreciation, and amortization) was USD 1.585 billion (+10.4%), reflecting contributions from improved operational efficiency and product structure optimization. Adjusted profit attributable to the company's owners was USD 725 million (+4%~4.5%), with earnings per share of 5.65 cents.

At the business segment level, the meat products division continued to be a cash cow, contributing the majority of operating profit. The fresh meat/pork business saw an increase in sales and improved cost control, driving double-digit growth in overall operating profit. Market reports also mentioned a 7.5% increase in pork sales and a slight decline in meat product sales, with clearer profit resilience in the context of structural differentiation.

Stock Price and Valuation: Improved Fundamentals Combined with Dividend Flexibility Drive Record Highs

The day after the earnings release, the stock price saw a strong surge, rising by more than 6% to reach HKD 8.36, setting a new record and pushing the market capitalization past HKD 100 billion. This price surge reflected investors' strong recognition of the company's better-than-expected performance, continued operating profit growth, and the doubling of dividends.

The market's buying enthusiasm was mainly driven by several factors. First, the better-than-expected operating profit growth provided strong support for the stock price, especially with the good performance in the meat products business and cost control. Second, the doubling of the dividend demonstrated WH Group's commitment to shareholder returns on the basis of profit growth, attracting more long-term investors. Third, the recovery in meat prices was another important factor driving the stock price rise. With the increase in pork prices, WH Group benefited from its meat products business in both the Chinese and U.S. markets, further enhancing the predictability of future earnings.

Brokerage reports generally hold a positive outlook on WH Group's prospects, driving further stock price increases. An analysis report from Bank of America Securities pointed out that second-quarter results slightly exceeded expectations, with an adjusted operating profit growth of about 19% year-on-year. The target price was raised to HKD 8.5, with a "Buy" rating maintained.

Key Operational Highlights: U.S. Business Guidance Raised, China Business Focuses on Efficiency

In the U.S., subsidiary Smithfield Foods reported year-on-year increases in sales and profits in the second quarter, and raised its 2025 full-year adjusted operating profit guidance to USD 1.15-1.35 billion, driven by steady demand for packaged meat and cost optimization. This growth trend aligns with the improvement in operating profit at the group level. For the half-year, Smithfield's revenue was approximately USD 7.558 billion (+10.24% year-on-year), with net profit attributable to the company slightly declining due to temporary factors. However, the raised full-year guidance shows confidence in profit recovery in the second half.

In China, the focus remains on channel efficiency and product structure, with gross margin and cost management of meat products contributing to the majority of operating profit. Management stated that the supply and sales of U.S. and Chinese businesses are largely completed within their respective markets, and the impact of tariff disruptions on overall operations is limited.

How to Buy WH Group on uSMART

After logging into the uSMART HK app, click on "Search" at the top right of the page, input the stock code to access the details page and view transaction details and historical trends. Then click the "Trade" button at the bottom right, select the "Buy/Sell" option, fill in the transaction conditions, and submit your order.

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