UBS: Lowered Wanzhou International's (00288) target price by 4.8% to HK$8 to maintain “buy” rating

The Zhitong Finance App learned that UBS released a research report stating that it will reduce the target price of Wanzhou International (00288) by 4.8% from HK$8.4 to HK$8, maintaining a “buy” rating. The bank lowered the company's 2026-2028 earnings forecast per share by 2%-6%, mainly reflecting more cautious expectations about the profit prospects of the US pig breeding business.

Wanzhou International's third-quarter sales, operating profit and net profit before biofair value adjustment decreased by 4%, 30%, and 45%, respectively, to US$6.783 million, US$465 million and US$244 million, respectively, in line with the bank's expectations. By region, the performance of North America and Europe was weak, with operating profit falling 53% and 39% year on year, respectively; the Chinese market was relatively stable, and operating profit fell 4% year on year. By business segment, the pig breeding and slaughter business dragged down overall performance, while the meat products business remained resilient.

Its subsidiary Smithfield (SFD.US) lowered its North American operating profit guide for the 2026 fiscal year from $1,225 million to US$1,375 million to US$900 million to US$1 billion. The original article points out that this adjustment mainly reflects the impact of pig products and pork-related factors, while the meat products business remains steady. Management attributed the downward outlook to lower commodity prices and a cautious US consumer environment. Wanzhou International's management reaffirmed its commitment to a dividend ratio of at least 50% and emphasized its commitment to maintaining the stability of shareholder returns.