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DRC [M-PF +9.6%] - Hard to escape the price war in the near-term - Update

We reiterate our MARKET PERFORM rating with 9.6% total return but lower our TP by 9.7%. We expect FY17F revenue to reach VND3.5 trillion (USD160 million), +6.9% vs FY16, propelled by an expected 22.6% YoY radial tires sale volume ramp-up. However, we expect continuing competitive pressure to force an 8.8% drop in DRC’s radial tire ASP vs FY16, resulting in continued losses from this segment and a 6.4% 2017 NPAT decline.