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TCM [O-PF +13.0%] - A marked improvement in prospects on multiple fronts - Update

We upgrade TCM to OUTPERFORM (O-PF) with 13.0% total return given improving labour productivity at Vinh Long workshop and an improving revenue mix. We forecast +4.3% FY17F revenue growth to VND3.2 trillion (USD140 million), propelled by an expected 14.1% YoY increase in garment sales. We pencil in 66.3% FY17F NPAT growth partially due to sharp GPM expansion of 2.1 ppts as contribution from the unprofitable yarn segment declines.