Guangdong Haid Group price target raised to RMB84.50 from RMB65.30 at UBS

UBS raised its price target on Guangdong Haid Group (SZ:002311) to RMB84.50 from RMB65.30, maintaining a Buy rating, citing the market's undervaluation of the company's overseas growth potential. The firm projects a 19.4% EPS compound annual growth rate for 2025-27, driven by stronger-than-expected overseas feed sales and volume growth of 28% CAGR, positioning its 'product + service' model as a core driver for long-term earnings expansion in international markets.

Analysis

UBS has materially increased its price target for Guangdong Haid Group (SZ:002311) to RMB84.50 from RMB65.30, a nearly 30% rise, while reiterating a 'Buy' rating. The upgrade is predicated on the firm's conviction that the market is undervaluing the company's international expansion capabilities. UBS identifies overseas growth as the core long-term earnings driver, supported by a business model combining products and services that is well-suited for new markets. This bullish outlook is quantified by a projected 19.4% earnings per share (EPS) compound annual growth rate (CAGR) for the 2025-2027 period. The forecast is underpinned by specific volume growth assumptions, with overseas feed volume expected to grow at a 28% CAGR, significantly outpacing the 12% CAGR anticipated for the domestic market. The revision is a direct response to stronger-than-expected overseas feed sales, lending credibility to the upgraded forecasts.

Key Decisions for Investors

• Investors may view the significant price target upgrade and strong growth forecasts from UBS as a validation for a bullish stance, particularly for those focused on growth in emerging markets.
• It is critical to monitor Guangdong Haid's quarterly earnings for confirmation of the projected 28% overseas feed volume growth, as this is the central pillar of the revised investment thesis.
• Consider the valuation impact of the overseas segment, as UBS's note suggests it is currently underappreciated by the market, presenting a potential source of alpha if the growth materializes as projected.
• While the international outlook is strong, investors should remain cognizant of the slower 12% domestic growth forecast and assess any associated risks that could affect the company's overall performance.