Translation: Original published in Finnish on 9/2/2026 at 7:50 am EEST.

Atria and HKFoods' earnings have been on an upward trend in recent years, but the presence of African swine fever in wild boars in Finland hampers the companies' export opportunities and increases the risks regarding the continuation of earnings growth. In a positive scenario, the African swine fever infection zone would no longer expand from its current state, and Finland would be able to conclude regionalization agreements with China, allowing exports from disease-free areas to continue However, our baseline assumption is that sales to the profitable Chinese and Japanese markets will remain frozen for the next few years, meaning that the expected returns on the shares will only moderately exceed the required return.

Without swine fever, the situation would be quite attractive

Without the uncertainty and economic impacts caused by swine fever, Atria's and HKFoods' valuation levels would be quite attractive. For example, Atria's EV/EBIT and P/E ratios for 2026 would be only around 9x, assuming earnings remain at least stable in H2. The same applies to HKFoods regarding the EV/EBIT multiple, although the P/E is slightly higher at 11x, as the company's financing costs are still clearly elevated for the time being. Without swine fever, we believe both companies would be in a fairly good position to continue their positive earnings trend during 2027, supported by efficiency and growth investments, among other things. In that case, the expected returns would rise to around 20% as a combined sum of valuation upside, dividend yield, and earnings growth.

Adjusted EBIT (MEUR)

Source: Inderes

The impact of African swine fever has so far been limited to exports

So far, the most key impact of swine fever for the domestic meat industry has been the prevention of export opportunities to high-price markets in China and Japan. Exports have been redirected to other Asian markets such as Korea and New Zealand. Atria reported that the financial losses caused by swine fever will amount to 4-5 MEUR for the rest of the year (7 MEUR on an annual basis), and HKFoods 1 MEUR for the rest of the year (we estimate 2 MEUR on an annual basis). Both companies maintained their positive earnings guidance for 2026 based on a strong H1.

In our view, swine fever creates some uncertainty regarding the companies' guidance, and a failure to achieve full earnings growth would naturally eat into some of the upside potential. If earnings growth remains at zero or very low this year, it would eat away a significant portion of the valuation's upside potential, which, combined with weaker 2027e earnings growth, would leave expected returns at only around the 10% level.

Recovery of exports to China is uncertain, but not impossible

Finland has agreed on regionalization agreements with export countries such as South Korea, according to which pork raised outside the restriction zone can be exported to the country. Efforts are also being made to conclude similar regionalization agreements with, for example, China, but success in this is uncertain. If swine fever were to spread to production pig farms, the continuation of exports to China would likely be delayed even further. The restriction zone for swine fever was recently expanded significantly when a wild boar that died of the disease was found on August 28. Pyhtää is 60 kilometers away from the core area of the disease. According to Yle, there are 10–20 pig farms located in the expanded restriction zone, although none of these are large in scale. We estimate that the expansion of the restriction zone will not yet, in the current situation, cause significant changes to the financial impacts reported by the companies. However, the spread further decreases the probabilities for the continuation of exports to China and Japan. For example, it took Belgium up to 5 years to lift its export ban to China after recovering from swine fever, so in a negative scenario the problem will persist for a long time. The expansion of the restriction zone to Western Europe would further impair exports.

We do not expect any impact on domestic sales

At present, we do not see African swine fever causing significant risks from the perspective of domestic sales in the meat industry. If the restriction zone were to expand to Western Finland, where there are more pig farms, it would increase the probability of the disease spreading to production pigs. In that case, the pig farms in question would practically need to be emptied and sanitized before farming could resume, which could cause disruptions in meat availability. However, the availability of pork is good, so the contamination of a few pig farms would not have a significant impact on the overall picture. Currently, there is even an oversupply of pork in Europe due to export restrictions.