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CSM - HOLD - 3Q results remain good, but fairly valued - Update

CSM reported 3Q13 gross margin of 27.4%, a slight improvement of 0.9% over 2Q13. In line with our view, the company’s gross margin has peaked. For the radial factory in 2014, CSM expects gross margin of only 15% due to suboptimal output volume and nominal profit for the first year of operation due to depreciation and interest expense. We therefore forecast FY14 net profit to grow modestly at 10% yoy. We maintain our target price of VND36,500 on a target PER of 8.0x. HOLD