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KDC - HOLD - Sweet deal, sweeter profits - Initiation

We initiate coverage on Kinh Do (KDC) with a HOLD rating and a target price of VND34,800, implying 9% upside from current price. Our target price is DCF-derived, based on 27% net profit CAGR from FY 2012F to FY 2016F, WACC of 21% and 3% terminal growth. KDC is now trading at 14.5x against forward 2012EPS of VND2,200, 34% premium over its domestic peers and 11.8x against 2013 EPS of VND2,700.