Asia Ex-J Consumer/ Transport analyst

Valerie Law, CFA

Equity Bottom-Up

<p>WH Group's share price plunged about 10% yesterday on news that China plans a 25% tariff on US Pork imports (Source: <a href="http://www.bloomberg.com/news/articles/2018-03-22/trump-orders-50-billion-hit-on-china-goods-amid-trade-war-fears" target="_blank">Bloomberg</a>). The company's share price recovered some ground as the market could be expecting a strong set of results for FY17, which will be released early next week. </p><p>In this article, I present two scenarios based on the impact of such a tariff on their packaged meat segment. Although both scenarios suggest a short-term pressure on EBIT margins by 1-1.5 ppt, the company may be able to reverse the dent in their group margins in the long run if they can achieve a speedy diversification of meat sources.</p>

WH Group's share price plunged about 10% yesterday on news that China plans a 25% tariff on US Pork imports (Source: Bloomberg). The company's share price recovered some ground as the market could be expecting a strong set of results for FY17, which will be released early next week. In this article, I present two scenarios based on the impact of such a tariff on their packaged meat segment. Although both scenarios suggest a short-term pressure on EBIT margins by 1-1.5 ppt, the company may be able to reverse the dent in their group margins in the long run if they can achieve a speedy diversification of meat sources.

WH Group: China's Pork Tariffs Could Trim EBIT Margins by 1 to 1.5ppt Near Term

Brazil

BRF SA is a food processor with a portfolio that includes established brands in Brazil and abroad, such as Sadia, Perdigao, Qualy, Chester, Perdix and Paty. The Company provides meat (poultry and pork), foods processed of meats, pizzas, pastas and frozen vegetables business segments. BRF SA is present in European, Latin American, Middle Eastern, African, Eurasian and Asian Markets.

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BRF SA (BRFS3 BZ)

WH Group: China's Pork Tariffs Could Trim EBIT Margins by 1 to 1.5ppt Near Term

WH Group's share price plunged about 10% yesterday on news that China plans a 25% tariff on US Pork imports (Source: Bloomberg). The company's...

Valerie Law, CFA

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52-week Range

Market Cap (USDm)

P/E

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