HPG [Reiterate OP + 17.2%] – Competitive environment likely to worsen – Update
Reiterate OUTPERFORM, TP reduced by 11% to VND 30,400 due to downward pull on ASP from Chinese imports that shows no signs of abating. We lower FY16 ASP per ton assumptions from VND 11.6m to VND 11.4m. We don’t foresee a sustained bounce in HPG’s stock price absent of a recovery in steel prices. HPG is trading at PER of 7.0x on our FY15E forecasted EPS, ~31% discount vs. peers, maintaining its attractiveness vs. peers.