Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back on 14 July 2024, <a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a> (WHG) announced it had submitted a plan to spin-off its Smithfield US and Mexican ops on the NYSE or NASDAQ</li>
<li>WHG the world's largest pork producer, has now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1117/2024111700031.pdf" target="_blank" rel="noopener">confirmed</a> it will sell up to 20% of Smithfield's shares on a fully diluted basis, in an initial public offering.</li>
<li>WHG has also proposed an assured entitlement for existing shareholders by way of a distribution in specie of existing shares of Smithfield, or a cash alternative.</li>
</ul>


Back on 14 July 2024, WH Group (288 HK) (WHG) announced it had submitted a plan to spin-off its Smithfield US and Mexican ops on the NYSE or NASDAQ
WHG the world's largest pork producer, has now confirmed it will sell up to 20% of Smithfield's shares on a fully diluted basis, in an initial public offering.
WHG has also proposed an assured entitlement for existing shareholders by way of a distribution in specie of existing shares of Smithfield, or a cash alternative.


<ul>
<li>Earlier this month, <a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a> announced it had submitted a plan to spin-off its Smithfield US and Mexican ops on the NYSE or NASDAQ,</li>
<li>These ops accounted for 54% of WHG's FY23 revenue and 22.4% of the operating profit; compared to 56% and 44.9% respectively in FY22.</li>
<li>We've been here before. A Smithfield spin-off was touted in 4Q23 (in the media). WHG acquired Smithfield for US$4.7bn in 2013, ahead of its 2014 listing. </li>
</ul>


Earlier this month, WH Group (288 HK) announced it had submitted a plan to spin-off its Smithfield US and Mexican ops on the NYSE or NASDAQ,
These ops accounted for 54% of WHG's FY23 revenue and 22.4% of the operating profit; compared to 56% and 44.9% respectively in FY22.
We've been here before. A Smithfield spin-off was touted in 4Q23 (in the media). WHG acquired Smithfield for US$4.7bn in 2013, ahead of its 2014 listing. 


Reservoir Hogs: WH Group (288 HK) Mulls US/Mexican Spin-Off

Analyst

Steve

Equity Bottom-Up

<ul>
<li>According to public news yesterday, <a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a> plans to list its US pork business Smithfield Foods, the largest US pork producer, back in the US again. </li>
<li>WH Group currently trades at 5x 2024E PE, assuming earnings return to the 2022 level in 2024E.  Since 2016, the company has had an average PE of 11x. </li>
<li>The stock is a buy with a fairly strong catalyst in the potential US listing of the Smithfield Foods business, while downside is limited. </li>
</ul>


According to public news yesterday, WH Group (288 HK) plans to list its US pork business Smithfield Foods, the largest US pork producer, back in the US again. 
WH Group currently trades at 5x 2024E PE, assuming earnings return to the 2022 level in 2024E.  Since 2016, the company has had an average PE of 11x. 
The stock is a buy with a fairly strong catalyst in the potential US listing of the Smithfield Foods business, while downside is limited. 


WH Group (288 HK):  Potential US Listing Of Smithfield Foods Could Be A Catalyst

Travis Lundy

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a> is two businesses - a US pork processor and a Chinese one - and both businesses are suffering lower margins than they'd like.</li>
<li>But they are doing better than and are cheaper than peers. And still the stock falls. Today, the stock price hit a 6-year low on dramatic underperformance of peers.</li>
<li>The question is what the proper discount would be for people who question its governance credentials. It's a really big discount now.</li>
</ul>



WH Group (288 HK) is two businesses - a US pork processor and a Chinese one - and both businesses are suffering lower margins than they'd like.
But they are doing better than and are cheaper than peers. And still the stock falls. Today, the stock price hit a 6-year low on dramatic underperformance of peers.
The question is what the proper discount would be for people who question its governance credentials. It's a really big discount now.


WH Group (288 HK) - Now Cheapest in Yonks Outright and Vs Peers

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<a href="https://www.smartkarma.com/entities/cp-pokphand-co-ltd" target="_blank" data-smartkarma-citation="entities:10135:1" rel="noopener">Cp Pokphand (43 HK)</a> (CPP) is a leading agri-food conglomerate in China and Vietnam. After market close on Thursday, it announced a privatisation offer by way of a scheme of arrangement from <a href="https://www.smartkarma.com/entities/charoen-pokphand-foods-public-company-limited" target="_blank" data-smartkarma-citation="entities:16131:1" rel="noopener">CP FOODS (CPF TB)</a>, the largest shareholder (49.74% of the outstanding shares). The offeror will offer HK$1.15 in cash for each scheme share. The bid represents a premium of 19.79% over the closing price of HK$0.96 per share on the last trading date (24 September prior to the trading halt). For good measure, CPP also released a statement outlining a profit warning. CPP noted that the net profit would decline -75% YoY in 8M21, which marks a deterioration to the net profit decline of -50% YoY in 1H21. The profit warning was attributed mainly to a poor performance in China caused by lower poultry and swine prices. CPP notes that poultry and swine prices in China and swine prices in Vietnam will have fallen further in September. <div class="content-highlight">The key condition precedents are the headcount test along with the scheme approved by at least 75% disinterested shareholders and &lt;10% rejection by all disinterested shareholders. As disinterested scheme shareholders represent 5,958.8 million shares or 24.75% of shares outstanding, the 10% blocking stake is 595.9 million shares or 2.48% of shares outstanding. No shareholder holds a blocking stake. Overall, we think the offer price is attractive and that the privatisation bid will be successful. </div>

Cp Pokphand (43 HK) (CPP) is a leading agri-food conglomerate in China and Vietnam. After market close on Thursday, it announced a privatisation offer by way of a scheme of arrangement from CP FOODS (CPF TB), the largest shareholder (49.74% of the outstanding shares). The offeror will offer HK$1.15 in cash for each scheme share. The bid represents a premium of 19.79% over the closing price of HK$0.96 per share on the last trading date (24 September prior to the trading halt). For good measure, CPP also released a statement outlining a profit warning. CPP noted that the net profit would decline -75% YoY in 8M21, which marks a deterioration to the net profit decline of -50% YoY in 1H21. The profit warning was attributed mainly to a poor performance in China caused by lower poultry and swine prices. CPP notes that poultry and swine prices in China and swine prices in Vietnam will have fallen further in September. The key condition precedents are the headcount test along with the scheme approved by at least 75% disinterested shareholders and &lt;10% rejection by all disinterested shareholders. As disinterested scheme shareholders represent 5,958.8 million shares or 24.75% of shares outstanding, the 10% blocking stake is 595.9 million shares or 2.48% of shares outstanding. No shareholder holds a blocking stake. Overall, we think the offer price is attractive and that the privatisation bid will be successful. 

C.P. Pokphand’s Privatisation Bid from CPF

China

Henan Shuanghui Investment & Development Co., Ltd. is an investment holding company.  Through its subsidiaries, the Company manufactures meat products and frozen food, provides processing and printing services, as well as operates in commercial trading.

Henan Shuanghui Investment & Development (000895 CH)

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Henan Shuanghui Investment & Development (000895 CH)

WH Group (288 HK)'s US/Mexican Spin-Off

Today's muted reaction to the spin-off news probably best sums up the situation. Even applying, a punchy value for Smithfield of US$10bn, I see WHG...

David Blennerhassett

Reservoir Hogs: WH Group (288 HK) Mulls US/Mexican Spin-Off

Unless we see a significant (and sustainable) reversal in the US/Mexican ops in the interim results, now hardly appears the opportune time for a...

David Blennerhassett

WH Group (288 HK): Potential US Listing Of Smithfield Foods Could Be A Catalyst

WH Group (288 HK) plans to list its US pork business Smithfield Foods back in the US, offering a potential catalyst for the stock which trades at...

Steve

WH Group (288 HK) - Now Cheapest in Yonks Outright and Vs Peers

WH Group has always been cheap to its peer group. Now it is worse. Pork prices are underperforming feed prices, lowering margins worldwide. WH has...

Travis Lundy

C.P. Pokphand’s Privatisation Bid from CPF

CPP announced a privatisation offer from CPF at HK$1.15 cash for each scheme share. Overall, we think the offer price is attractive and that the...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

WH Group (288 HK)'s US/Mexican Spin-Off

Today's muted reaction to the spin-off news probably best sums up the situation. Even applying, a punchy value for Smithfield of US$10bn, I see WHG...

David Blennerhassett

Reservoir Hogs: WH Group (288 HK) Mulls US/Mexican Spin-Off

Unless we see a significant (and sustainable) reversal in the US/Mexican ops in the interim results, now hardly appears the opportune time for a...

David Blennerhassett

WH Group (288 HK): Potential US Listing Of Smithfield Foods Could Be A Catalyst

​WH Group (288 HK) plans to list its US pork business Smithfield Foods back in the US, offering a potential catalyst for the stock which trades at...

Steve

WH Group (288 HK) - Now Cheapest in Yonks Outright and Vs Peers

WH Group has always been cheap to its peer group. Now it is worse. Pork prices are underperforming feed prices, lowering margins worldwide. WH has...

Travis Lundy

C.P. Pokphand’s Privatisation Bid from CPF

CPP announced a privatisation offer from CPF at HK$1.15 cash for each scheme share. Overall, we think the offer price is attractive and that the...

Arun George

WH Group (288 HK) plans to list its US pork business Smithfield Foods back in the US, offering a potential catalyst for the stock which trades at...