Wh Group Ltd Ord

Dear analysts and investors, good evening. Welcome to our annual resource announcement by WH Group. Today we have with us Mr. Wen Long, Chairman and Executive Director. And he is seated on the stage with us. Next to him, we also have Mr. Woli Jun, our executive director and CEO, our CFO and vice president, Madam Chen Jian. I'm Zhou Xiaoming, the VP. We also have online with us our leaders, Mr. Wan Hongwei, Vice Chairman of the group, Mr. Ma, Mr. James Smith and Louis and Mark. We will first listen to the introduction of our performance in 2025 and then we will proceed to Q&A session. First of all, Mr. Guo, please take us through the financial situation and business review good evening everyone I'm going to take you through the financial summary business review of 2025 packaged meat sold 3.054 million tons a drop of 1.5 percent pork sold 4.089 million tons, an increase of 8.6%. Revenue realized, 28.026 billion U.S. dollars, up 8%. EBITDA, 3.377 billion, up 9.7%. Operating profit, 2.612 billion, up 8.7%. Profit before tax, 2.5 billion, up 13.2%. profit attributable to owners of the company 1.591 billion up 8.2 percent basic earnings per share 12.4 US cents based on our operating performance and cash flow for the year to better make returns to our shareholders we have decided that we are going to propose a final dividend 0.41 Hong Kong dollars together with interim dividend 0.2 for the full year 0.61 Hong Kong dollars total payout 1 billion and they will be distributed after the shareholders meeting if you look at our segment performance packaged meat is still our core contributing 50.6 percent of revenue and 82 percent of our profit POC contribution 40 percent to revenue and 22 percent to our profit others 8.8 and 4.1% respectively and North America contribution 54.3% to our revenue 53% to our profit China business contribution 30% to our revenue and 35% to our profit Europe contribution 15.4% and 10.9% respectively over the year of 2025 we maintained cash operating cash flow at 2.526 billion with a declining capex at 611 million down by 13.6%. Shareholder return 320 the proposed level for the full year 0.61 so that will exceed 1 billion US dollar payout. We have also maintained a conservative leverage level and debt level towards the end of the year. 3.633 billion as our total borrowing and total debt to equity ratio 0.28. The global economy demonstrated resilience and escalating trade tensions and policy uncertainties with divergent trends across different regions. Chinese hog market was characterized by strong supply and weak demand, leading to lower pork prices. Effective demand for consumer goods was insufficient. Hog prices in North America rebounded and market spreads narrowed. Profit of hog production improved, while the fresh meat and packaged meat business faced cost pressures. In the European market, hog prices declined due to animal diseases, war and export restrictions. We leveraged our global platform and vertically integrated business model, optimized our business structure, promoted efficiency improvement and cost control leading to improvement in all key operating metrics and record high profits. The number of slaughtered hogs in China increased by 2.4% to 720 million heads. By the end of the year, hog inventory in China was 430 million heads, up 0.5% over the end of 2024. So the volume came up with the prices coming down. Number of slaughtered hogs in the US decreased by 0.8% to 127 million heads. Average hog price per kilo 1.57 US dollars in the United States and 1.46 euro per kilo in Europe, down by 8.5%. So hot prices in China and Europe both went down. If you look at the spread in the market, average cut-out value in the US was 2.27 US dollars per kilo, an increase of 7.4%. Meat prices went up by 7.4%, and industry market spread narrowed as hog prices increased more than pork values. Operating profit, US$934 million in China, down by 1%. Packaged meat $191 million down by 3.6%, pork $44 million down by 20%. We implemented various innovative measures, continued to enhance performance of underperforming segments, expanded sales network and optimized product mix amid a challenging market environment. Our total meat sales volume reached a record high while profit remained stable. We have innovative marketing strategies and accelerated channel transformation driving rapid sales growth in emerging channels. Profit per ton remains strong. We adhere to the strategy of stabilizing profit and expanding volume for pork business. We expand customer base and sales channels resulting in increase in sales volume. We continue to increase the volume of chicken produced and processed, adjusted product mix and expanded sales network for poultry business. We accelerate digital transformation to drive upgrades in management across operations, sales, hog production, administration and R&D. For North America operating profit, US$1.393 billion up 17.4%. Packaged meat, $1.097 billion, down by 6.6%. Pork, $444 million, up 161.2%. We capitalized on favorable market opportunities, leveraged vertically integrated business model, optimized operational management and implemented cost-saving and efficiency-enhancing measures, resulting in high record earnings. For packaged meats, total sales volume remains stable, supported by diversified product portfolio and channel mix, while high-margin products continue to deliver growth. We continue to improve mix, adjust price and control costs to absorb the pressure of rising raw material costs. For pork business, profit improved significantly, driven by the hog production segment that capitalized on favorable market conditions, improved performance indicators and lowered hog raising costs. Fresh meat business enhanced operational efficiency, reduced expenses and optimized product and channel mix. We continue to improve KPIs of hog production, reduce cost, increase efficiency and strive to achieve a competitive cost structure. Europe business operating profit 285 million up 4%, packaged meat 155 million up 14%, pork business 90 million down by 31.3%. We leveraged the strength of our business model to counter market fluctuations, focused on the development of packaged meat business, pursued synergistic M&A leading to sustained growth in volume and profit. We expanded the scale product offering and geographic footprint of packaged meat by integrating newly acquired operations. We adhered to the strategy of improving mix, adjusting price and controlling cost. For pork business, we leveraged the vertically integrated business model. Profits of the segment improved significantly, mitigating the impact of declined hog prices. The poultry business achieved growth in both volume and profit by improving management and expanding sales network, seizing market opportunities and controlling cost. We focused on the packaged meat segment, expanded our supporting business and strengthened business footprint and successfully acquired Pupil Foods from Poland and Wolf Group from Germany. WH Group will continue to consolidate our global resources, leverage synergies, adhere to the business philosophy of improving mix, adjusting price, and controlling cost, and the strategy of industrialization, diversification, internationalization, and digitalization to enhance our leading position. We will continue to focus on our core packaged meat business to achieve steady growth in volume and profit. We respond to evolving consumer market and promote product and channel transformation in China to achieve breakthrough in sales volume. We mitigate the measures of increasing cost and drive growth in high margin products to maintain high profit in the US. We continue to expand our business scale in Europe through organic growth and acquisitions, reducing our cost and improving our efficiency to increase profit. We will explore opportunities to optimize and increase the processing capacity of pork business through M&A, new construction and facility upgrade, optimize product mix and sales channels to enhance profit. We will achieve a competitive cost structure for hog production by improving the KPIs and effectively preventing and controlling diseases. We will accelerate the development of our poultry business and enhance operational performance to further advance our meat diversification strategy and achieve synergistic development through complementary businesses. That's the end of my report. Thank you very much. Thank you, Mr. Guo. Now let's enter the Q&A session. If you would like to ask questions, please raise your hand and tell us who you are and who you represent. Let's invite the first question from the floor. Thank you very much for the opportunity. I'm from Morgan Stanley. I'm Lee Lian Lo. I have two questions. First of all, Mr. Guo, you talked about 2026 for packaged meat business. Mr. Wang has been paying very close attention to that and you have been making adjustments. So for this segment in China, If you look at hog prices declining continuously, so in 2026 with a rather high level of profit per ton last year, do you think you can achieve new heights this year? And concerning packaged meat business, in terms of sales volume, it's been suppressed by demand, so it hasn't been very strong. What about this year? What is your thinking? And then about the US side, packaged meat business, as you mentioned, you would like to expand high unit price products and high profit margin products. So what is the overall thinking about 2026? And then taking one step back, Mr. Wan, the entire group is in a stabilization stage. What about the next three to five years? What would be the focal point? In terms of return to shareholders, what is your plan?

So the question came from Lydian of Morgan Stanley. The first part relates to the packaged meats. As Mr. Guo mentioned, that packaged meats is a strategic priority for WH Group. With respect to China, Given the relatively low raw material cost, in light of the strong profit per metric ton performance in 2025, is there an opportunity to achieve even higher profit per metric ton in China for 2026? And also, the volume of China packaged meat has been under pressure due to the demand in the market, and how should investors look at the demand for the volume for 2026. And with respect to the U.S. package mix, Shane, Mark, I will defer to you to answer this part. As we mentioned, we will promote more high unit cost, high margin products. And what's the outlook for U.S. package mix, I guess, in terms of volume and profitability going forward? And the second question for Chairman Wang, what will be the company's strategic priority in the next three to five years and what will be the shareholder return look like in the future.

So leaders, can you talk about the package to meet business? Can we connect them? Good evening. I'm from . I'm joining online concerning the first question about packaged meat. In 2026, the hog prices have been dropping. So concerning our strategies,