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QNS [BUY +26.9%] - Execution on new products to dictate soymilk prospects - Update

We reiterate a BUY rating and keep our TP relatively unchanged. We believe QNS is undervalued at a 2018F PER of 8x with 76% of NPAT deriving from its leading branded soymilk platform. That said, QNS’s ineffective capital allocation to its sugar business is dampening value creation. We project QNS’s ROIC will gradually deteriorate from a peak of 36% in 2015 to 19% in 2020F.