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HT1 [BUY +38.7%] - Valuation depressed as weak earnings veil solid cash flow - Update

We maintain a BUY rating for HT1 as we believe the stock has fallen into undervalued territory given healthy and stable cash flow. HT1 looks compelling at 2018F EV/EBITDA of 4.7x. 9M 2017 cement selling volume grew 3.9% vs 9M 2016, while industry volume fell by 2.5%. Stronger-than-expected GPM compression due to outsourcing activity and FX losses dragged 9M 2017 reported NPAT-MI down 49% to VND319 billion (USD14.1 million) vs 9M 2016.