核心业务改善迹象，维持买入

Wellhope(603609 CH) Buy:Signs of improvement in core businesses China ◆Revenue grew in 2025 and 1Q26, but profit collapsed; feedcontributed 60%+of gross profit, while hogsremained adrag MAINTAIN BUY TARGET PRICE(CNY)PREVIOUS TARGET(CNY)8.609.30SHARE PRICE(CNY)UPSIDE/DOWNSIDE6.63+29.7%(as of01 Jun 2026) Structuralimprovement in core businesses:broilersreturned Maintain Buy and lower target price to RMB8.60 from RMB9.30 Profitabilitydivergence across segments.Wellhope reported 2025 revenue ofRMB35.76bn (+10% y-o-y), yet net profit slumped to RMB53m (-85% y-o-y), primarilydue todeep losses in the hog segment. This trend persisted into 1Q26: revenue grewto RMB8.93bn (+16% y-o-y) while net profit plummeted to RMB8.7m (-93% y-o-y).Looking into 2Q26, weseepoultry prices trending better y-o-y, with the poultry valuechain remaining profitable, while domestic livestock and poultry inventories are ample.As such, we expect 2Q26 to largely continue the 1Q26 trajectory: feed and poultrysegments sustaining robust profitability, though the hog business continues to weigh Core businesses show improvement signals; clear recovery paths acrossthreesegments:1)Broiler. The broiler segment returned to profit in 1Q26, reversing full-year losses in 2025. Two key drivers underpin this turnaround: proactive adjustmentof captive supply ratios to maintain operational flexibility amid market volatility, andcontinued channelmigration towards higher-margin routes. 2)Feed. Feed serves asWellhope’s "anchor", generating RMB1.3bn gross profit in 2025 on 4.64m tons sold(+17% y-o-y). Momentum strengthened in 1Q26, with rapid volume growth mainly drivenby ruminant feed and poultry feed. The company set its 2026e target of 10-15% volumegrowth for the feed segment (source: 2025 annual report).3) Hog.Hog operations Yihui Sha* (Reg. No. S1700519100001)Head ofA-share Agriculture ResearchHSBC Qianhai Securities Limitedyihui.sha@hsbcqh.com.cn+86 21 5066 2004 * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulations Maintain Buy and lower TP to RMB8.60 from RMB9.30.We continue to value thestock following a PB-ROE methodology, with a 1.43x PB multiple corresponding to a10% ROE, in line with its 2017-24 historical average (unchanged). Based on a 2027eROE of 7.3% (from 7.7%), we derive a 1.04x 2027e target PB multiple (from 1.1x).Applying this target multiple to our 2027e BVPS estimate of RMB8.20 (from RMB8.37),we lower our target price to RMB8.60 (from RMB9.30). Our target price implies c30% upside from the current share price. We maintain our Buy rating.Seekey downside Issuer of report:HSBC Qianhai Securities Limited Disclosures & DisclaimerThis report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with theDisclaimer, which forms part of it. View HSBCQianhai Securitiesat:https://www.research.hsbc.com Financials & valuation:Wellhope Source: HSBCQianhai SecuritiesNote:Priced at close of 01 Jun 2026 Earnings revisions Wellhope reported 2025 revenue of RMB35.76bn (+10% y-o-y), yet net profit slumped to RMB53m(-85% y-o-y), primarily due to deep losses in the hog segment. This trend persisted into 1Q26:revenue grew to RMB8.93bn (+16% y-o-y) while net profit plummeted to RMB8.7m(-93%y-o-y).Segment-wise, profitability diverged sharply: the feed business contributed 64% of gross profit witha healthy 9.8% margin on 38% of revenue in 2025, serving as the core profit engine; the poultrysegment accounted for 45% of revenue but carried only a 1.95% margin in 2025,though broiler Looking into 2Q26, weseepoultry prices trending better y-o-y, with the poultry value chainremaining profitable, while domestic livestock and poultry inventories are ample. As such, weexpect 2Q26 to largely continue the 1Q26 trajectory: feed and poultry segments sustaining robustprofitability, though the hog business continues to weigh on earnings amid persistently weak hog Where wediffer from market consensus Our 2026-27 net profit estimates are33.4-35.3% below the consensus,as we are more prudenton chicken and hog prices;meanwhile,the consensus has not updated since the annual report. Disclosure appendix Analyst Certification The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s)whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the coveringanalyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) orissuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), andany other Important disclosures Equities: Stock ratings and basis for financial analysis HSBC and itsaffiliates, including the issuer of this report (“HSBC”) believes an investor's decision to buy or sell a stock shoulddepend on