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STK [U-PF -15.8%] - Valuation not justified by volume recovery prospects - Update

We cut our target price for STK by 27.4% to VND24,600 and downgrade the stock to UNDERPERFORM due to the following: Order volumes fell sharply in anticipation of falling yarn prices. STK reported preliminary FY15 results with net revenue of VND1,035 billion (USD47 million), 29% lower than last year and reaching just 78% of our forecast. The fall in volumes stemmed mainly from an unexpected deferment of orders in the second half as clients sought to capitalize on falling PET prices.