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CSM - OUTPERFORM - Radial tyre maker still in ramp up phase - Re-Initiation

We re-initiate coverage of CSM with a OUTPERFORM rating and a target price of VND 42,800 (upside 8.1%, TSR 13.2%). Natural rubber expected to drop 10.6% in FY15, would normally equate to 4.2% drop in COGS, however CSM is assumed to transfer all benefits to its customers. Therefore, we will not expect to see any change in GPM in FY15 and thereafter model for a drop in GPM as nat rubber prices recover.