WH Group (00288) saw its shares drop more than 4% in early trading on Thursday. As of the time of writing, the stock was down 4.38% at HK$7.10, with turnover reaching HK$336 million.

The decline came after the company released its earnings, with its subsidiary Smithfield lowering its adjusted operating profit guidance across all business segments for fiscal 2026.

According to UBS, excluding the impact of biological fair value changes, WH Group's second-quarter operating profit is estimated to have fallen 7% year-on-year to US$618 million, missing market expectations. Operating profits from its North American, Chinese, and European operations all experienced declines.

Morgan Stanley released a research note updating its risk-reward assessment for WH Group, cutting its 2026 earnings forecast by approximately 7%. This mainly reflects the downward revision in the second-half guidance for North America and weak European pork market conditions, partially offset by quarter-on-quarter improvements in Chinese packaged meat margins as channel investments normalize. The bank also lowered its 2027 and 2028 earnings forecasts by 7% to 9%, reflecting the lower 2026 base.