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HT1 [O-PF +12.0%] - Margins under pressure in medium term - Update

Company Research

15 Mar 2017

We downgrade HT1 from BUY to OUTPERFORM with +12.0% total return. We expect 9% FY17 revenue growth driven by 10% cement sales growth on the back of solid domestic construction activities amid a tougher competitive landscape. We expect FY17 NPAT growth of 5% driven by narrower GPM but decreasing interest expense. Binh Phuoc 2 will ease capacity limit and margin contraction but investment will hurt cash flow.
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