DRC - BUY - New radial tire plant and gross margin expansion improves 2013 outlook - Update
We upgrade our rating on DRC from HOLD to BUY and raise our target price to VND50,300 on a stronger 2013 outlook. We revise our sales volume forecast to account for output from Phase 1 of DRC’s new radial tire plant, which was put into operation 26 March. We also increase our gross margin assumptions on weak rubber prices due to forecasted surplus in the global market. These two factors transfer to FY13 EPS growth of 12% to VND5,033.