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DHG [M-PF +6.8%] - Tax savings to cushion earnings over next three years - Update

We reiterate our MARKET PERFORM rating despite revising our TP by +13% due to lower effective tax rate projections, DCF rollover, and a 60 bps reduction in WACC. We expect sales to grow 13% vs FY16 aided by antibiotics, painkillers and vitamin supplements. DHG’s marketing push for vitamin supplements will rein in EBIT growth at 10% in FY17F vs FY16. Ramp-up at new factories will lower tax rates, cushioning NPAT to rise 13% vs FY16.