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DAG [O-PF +10.3%] - Good revenue growth but stalled GPM - Update

We revise down our TP for DAG by 9.2% and revise our rating to an O-PF recommendation. 43% revenue growth of uPVC profiles expected in 2017 as capacity constraints are dismantled. DAG’s medium term revenue growth forecast at CAGR 18.1% in the next five years. We lower FY16 GPM forecast from 10.3% to 9.3% as higher input material cost outpaces ASPs. Lower GPM than expected from 2017 onward drags down our forecast for FY16F and FY17F NPAT by 13.2%. 9.7x ttm P/E ratio is compelling