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KDC - HOLD - Single digit growth, rich valuation - Update

We lowered our target price from VND62,400 to VND45,000 due to worse than expected top and bottom line growth, as gross margins are likely to decline and as valuation is rather rich. 9M revenue reached VND3.4tn (+6.7% yoy) and gross margins reached 44.9%, thanks to better product mix, improved supply chain, and lower raw material costs, but we expect margin will normalize towards 41%. Currently, KDC is trading at 18x our estimated FY13’s EPS, higher than peers.