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DRC - HOLD - Tough Q4 ahead - Update

DRC targeted its 4QFY13 profit to be down 38% yoy due to lower-than-planned output of the new radial factory, incurred interest expense and depreciation expense. We forecast nominal profit growth of 3% in FY2014 as DRC is forced to move the bias factory, which will reduce FY14 production by approximately 15%. In addition, we do not expect much profit from the new radial factory.