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DPM - UNDERPERFORM - Entering a down cycle - Update

We downgrade DPM from HOLD to UNDERPERFORM on a reduced target price of VND30,100, down from VND43,900, given an expected fall in global urea prices until FY18, a potential increase in input price from 2Q-2014 and a lower cash dividend payout from FY14 onwards. DPM is trading at a PER of 10.4x 2014 EPS and 14.3x 2015 EPS. FY13 dividend yield remains high at 11.5% as the company proposed to double it, as we expected in our previous report, but we do not believe it is sustainable.