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DHG [UNDERPERFORM -12.7%] - Subdued in-house product sales; tax benefits the saving grace - Update

We reiterate our UNDERPERFORM rating on DHG despite raising our TP by 6% primarily thanks to a higher domestic peer PER-derived TP. DHG looks unappealing to us at TTM PER of 23x. H1 2017 in-house sales grew a mere 2% YoY. Sales did not recover as well as we expected following a weak Q1 2017, which was partly disrupted by a change in DHG’s distribution model. We lower our in-house sales growth for 2017F from 13% to 10%. We anticipate an improvement in H2 2017 as DHG’s coordination