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WH Group Q4 Profit In Line; 2023 Margin Pressured by Inflation; Lowering FVE to HKD 7.80

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Securities In This Article
WH Group Ltd Shs Unitary 144A/Reg S
(00288)

Narrow-moat WH Group 00288 reported 2022 results that broadly met Refinitiv consensus on net profit despite a slight miss on revenue. Operating profit was consistent with expectations. Management noted that inflationary pressure could continue to weigh on margins in 2023. We have lowered our operating margin estimates primarily on the U.S. upstream business and reduced our fair value estimate to HKD 7.80 per share (from HKD 8.10), which implies 11 times 2023 P/E and is within the 10-year historical multiple range of 7 and 15 times. We think shares are undervalued, but the market could be concerned about persistent margin pressure in the near term.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Jacky Tsang

Equity Analyst
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Jacky Tsang is an equity analyst for Morningstar Asia Limited, a wholly owned subsidiary of Morningstar, Inc. He covers the Greater China consumer defensive sector, which includes packaged food, home care, food retail, and personal products companies.

Before joining Morningstar, Tsang was the research lead at GfK, where he covered a variety of listed companies, notably in the consumer durables and electronics sectors across the Asia-Pacific region. He has presented as an industry expert at various sell-side investor conferences. He also worked previously with Coleman Research, where he conducted primary industry research and helped generate leads for clients seeking channel checks.

Tsang holds a bachelor's degree (first class) in English studies from The Hong Kong Polytechnic University.

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