Bank of America Securities released a research report stating that it reaffirmed Wanzhou International's (00288) “buy” rating and maintained a target price of HK$6 based on the company's yield support of about 6%, possible improvements in US upstream business, and long-term options for restructuring or spin-off of the US business. The company's US upstream business is expected to turn a loss into a profit in the second and third quarters of this year. As for the Chinese business, it will remain stable, mainly due to record profitability of meat products, narrowing upstream losses, and factors supported by an easing base.
The bank anticipates that the profit performance of the company's Chinese business in the 2024 fiscal year will increase in the number of units. As for the rest of the year, Wanzhou's pork business base will be more relaxed, and the profitability of packaged meat will be strong. As for the company's US business, the bank expects US pig production to be profitable in the second and third quarters of fiscal year 2024, and packaged meat will remain flexible in terms of price discipline and diversified product supply.