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DRC [Downgrade M-PF 8.6%] – Bias margins gap down, utilisation high – Update

Downgrade to MP, TP reduced by 5.0% to VND 57,000 on downward revision to NPAT forecast. Our profit forecast essentially now matches company guidance of a flat bottom line. Our revision was triggered by a “gapping down” of bias tire margins in 1Q15. Last three quarters of the year will see shorter depreciation period and will raise depreciation expense of radial factory by 68.3% vs FY14.