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DRC - Radial growth comes at expense of bias tyres; flat PBT guidance well-below our forecasts - AGM Note

DRC is guiding for flat profit growth in FY15 despite 11% increase in revenue on doubling of radial tire sales; guidance is well-below our forecast of 29% profit growth for 2015. DRC’s current radial tyre line-up is serving saturated niche category and at the same time chipping away at its own sales of higher margin bias tyres. AGM approves VND3,000 cash dividend (5% dividend yield at closing price of VND59,500 9/4/2015) and 10% stock dividend for FY14.