UBS has issued a research report slightly lowering its target price for WH Group (00288) by 1.1%, from HK$9.5 to HK$9.4, while maintaining a "Buy" rating, citing an expected dividend yield of approximately 8%.

The bank noted that due to a more cautious outlook on the company's U.S. operations, it has reduced its earnings forecasts for WH Group for 2026 and 2027 by 5% and 2%, respectively. Its U.S. subsidiary, Smithfield, reported its third-quarter 2026 results after market close on September 8, highlighting downside risks arising from weaker margins in its fresh pork processing segment and softer hog prices.

In the fresh pork business, the USDA Pork Carcass Cutout value has declined further since the company's August outlook, causing short-term industry margin pressures to exceed the assumptions previously guided. In the hog farming segment, market hog prices have also retreated, prompting the company to adopt a more cautious stance on the profitability of this division.

Smithfield currently expects an adjusted operating loss of $70-90 million for the fresh pork business in the third quarter of fiscal 2026, and adjusted operating profit of $25-45 million for the hog production segment; both projections primarily reflect the impact of unfavorable industry price trends. Given that the full-year outlook for the packaged meats business remains unchanged, these estimates imply that the company's overall adjusted operating profit for the third quarter of fiscal 2026 is expected to be in the range of $115-175 million.

The company plans to provide updated full-year guidance on fresh pork, hog production, and overall company adjusted operating profit when it announces its third-quarter fiscal 2026 results.