Wh Group Ltd Ord

Good evening, analysts and investors. Welcome to WH Group's 2026 First Quarter Results Conference. This is Guo Lijun, Executive Director and Chief Executive Officer of WH Group. Joining today's results call are members of the senior management from WH Group and our subsidiaries, Shuanghui Development, Smithfield Foods, and Morlini Foods in Europe, including Mr. Wan Long, Chairman of the Board and Executive Director of WH Group, Mr. Wan Hongwei, Vice Chairman of the Board of WH Group and the Chairman of Shuanghui Development, Mr. Ma Xiangjie, Executive Director of WH Group and President of Shuanghui Development. Shane Smith, President and CEO of Smithfields and Mark, Chief Financial Officer. Louis, CEO of Morlini Foods. Ms. Joanna Yan, Chief Financial Officer of the company and Zhou Xiaoming, Vice President of the company. Today's earning call will be divided into two parts. I will first present the company's first quarter financial and operating performance, and then we'll take your questions. Now I will walk you through the first quarter performance of 2026 of WH Group. In the first quarter, packaged meats sold total volume was 781,000 metric tons, 9.4% higher than last year. Pork sold is 1.037 million metric tons, 5.6% higher than last year. Total revenue, $6.994 billion, 6.7% higher than last year. EBITDA, $869 million, 10.6% higher than last year. Operating profit, $643 million, 7.5% higher than last year. Profit attributable to owners of the company, $396 million, 8.8% higher than last year. Basic earnings per share is 3.09 US cents, also 8.8% higher than last year. So based on the performance of the first quarter, our volume revenue and the profits all achieved year-over-year growth. Now we look at the performance by segment. PackageMate is still the core business of our group, contributing to 51.7% of total revenue and 90% of our profits. Pork business is 39.1% of our revenue and 13.4% of our profits. Other business is 9.2% of revenue and a loss or expense of $21 million. Breakdown by region, North America is 53.1% of revenue. 54% of operating profit. China business is 31% of revenue and 39% of operating profit. European business is 15.8% of the revenue and 7% of the profit. During the first quarter of 2026, China hog market has a total slaughter volume of 200 million heads, 2.8% higher than last year. At the end of first quarter, hog inventory in China was 420 million heads, up 1.5% year over year. China average hog price was remain be 12.35%. per kilogram, 23% lower than last year over a year. So overall, the volume, the total supply increased, inventory increased, and the price has decreased. In the U.S., the number of slaughter hogs decreased by 0.8% to 32 million heads, and the average hog price was 1.44 U.S. dollars per kilogram, 0.6% higher year over year. In Europe, the average hog price was 1.16 euro per kilogram, down 18% year over year. So in the first quarter, in China and in Europe, the hog prices has declined year over year, whereas in U.S., the hog price maintained stable and with a slight increase compared to last year. Now we look at the performance by different regions. In China, the operating profit in the first quarter is $251 million, 16.7% higher than last year. Packaged meats deliver $255 million of profit, 25.6% higher than last year. Pork business has a loss of $2 million year-over-year, decline of $18 million. So packaged meat business has delivered a growth in both volume revenue and operating profits. And the operating profit has achieved double-digit growth. In North America, the operating profit was $347 million, 5.2% higher than last year. Package meets $278 million of operating profit, 4.5% higher than last year. Pork business, 98 million of urban profit, 98 million, 5.4% higher than last year. So in North America, our business have maintained growth in both revenue as well as profitability. In Europe, the operating profits declined by 15% to $45 million. Packaged meat business delivered $45 million of operating profits, increased by 40% compared to last year. Whereas for pork, there's a loss of $10 million, $32 million lower than last year. So in China and in Europe, we have growth in both package meets, but in the upstream business, because of the market dynamics, we have declined profitability in both China and Europe. Going forward, WH Group will continue to consolidate its global resources, leverage synergies, adhere to the business philosophy of improved mix, adjust price and control costs, and a strategy of industrialization, diversification, globalization, digitalization to enhance our leading position in the global meat industry and lay a solid foundation for long-term sustainable development. In terms of priorities, we'll continue to focus on our core package meat business to achieve steady growth in volume and profitability. In China, we'll respond to involving consumer markets and promote product and channel transformation to achieve a breakthrough in sales volume. In the U.S., we need to mitigate the pressure of increasing costs, optimize product mix, maintain high profitability. In Europe, we'll continue to expand our business scale through organic growth and acquisitions, reduce costs, and improve efficiency to increase profitability. In the pork business, we will continue to increase the harvest capacity, absorb fees to cost, and strengthen competitiveness and profitability. In hog production, we'll achieve a competitive cost structure by improving the biosecurity and KPIs. We will also accelerate development of poultry business and enhance operational performance to further advance our meat diversification strategy and achieve synergistic development through complementary business. We will also implement management and process innovations as well as automation upgrades for all segments while accelerating the research and application of artificial intelligence to reduce costs, increase efficiency, and enhance overall competitiveness. So that's all for the first quarter performance. Now we'll open the line for questions.

第一个问题请莫文斯丹利·黎连楼。 黎连楼。

Hello, thank you for this opportunity. Can you hear me? Yes, I can hear you. Okay, thank you. First of all, congratulations to China for the very good results in the first quarter. As Mr. Guo said, the amount and the profit are double. If we compare the amount of meat products in the first quarter last year, there is a lot of pressure. Some of them may be because of the low numbers. In terms of the price drop after the Spring Festival, the price is still relatively favorable. However, in the second quarter and in the future, the price may not be as good as it was in the first quarter. How do we continue to achieve the goal of increasing the price this year? um um Thank you. These are the two questions.