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DRC - MARKET PERFORM - Radial sales pick up but higher SG&A cut profits - Update

A pick up in radial tire volume boosted sales revenue by 16.4% but NPAT dropped 10.4% YoY on higher SG&A and interest expenses after nine months. At the end of Sept, DRC sold 75,000 radial tires or 65% of our target. The 9M14 EPS stand at VND3,006 or 76% of our target. DRC is trading at PER 14.9x and 11.4x in FY14 and FY15 respectively and a dividend yield of 3.4% for 2014. We reiterate target price of VND56,500.