Citibank: Lowers target price of Wanzhou International (00288) to HK$10.1

The Zhitong Finance App learned that Citi released a research report stating that it will cut Wanzhou International (00288)'s projected profit forecast for 2026-2028 by 6-11% to reflect lower estimates for the US and China business. The target price was lowered from HK$12.3 to HK$10.1. The dividend is assumed to remain constant and a “buy” rating is maintained based on an attractive yield.

Wanzhou affiliate Smithfield's operating performance in the second quarter was in line with the bank's expectations for Wanzhou International's US and Mexico regions, but cutting the 2026 adjusted operating profit guidelines by 7% fell short of expectations. Citi believes that Smithfield's downward guidance is due to a downward trend in pig futures prices. The decline is likely due to increased industry supply and weakening demand from inflation. However, since fourth-quarter pig prices are usually seasonally weak, it is still too early to determine whether the US pig price cycle will reverse.