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DHG [MARKET PERFORM -7.8%] - Sales pick-up in Q2 2018 not a sign of what’s to come - Update

We upgrade our rating to MARKET PERFORM given a 16% share price correction since our previous update. 2018F PER of 21x appears hefty against a 2018-2020F EPS CAGR of 4%. We curtail our TP by 4% mainly owing to increases in the risk-free rate and risk premium. A streamlined sales force boosted Q2 2018 in-house product sales (+14% YoY) after a 4% decline in Q1, but this does not alter our conservative view on DHG’s medium-term prospects.