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LSS - SELL - Bearish on sugar, bonds scare off new investors - Update

We downgrade LSS from BUY to SELL. We also reduce our target price from VND23,000 to VND12,000 (fully-diluted) to reflect falling sugar prices and the dilutive impact of a planned convertible bond (CB) issuance in October. Prices for sugar no.11, the benchmark contract price for raw sugar trading, has fallen 11% ytd, leading us to revise our sugar selling price assumption for FY12 from VND18,300/kg to VND16,500/kg (-12.5%).