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KDC [SELL -21.2%] - Hefty valuation for an ice cream/cooking oil franchise - Initiation

Company Research

11 Aug 2017

We initiate on KDC with a SELL recommendation. Our target price of VND32,200 implies a total stock return of -21% inclusive of a 4% dividend yield. Reported EPS to plummet in 2017 and 2018 in the absence of one-off income from asset divestments/revaluation and goodwill amortization from recent M&A. If we exclude goodwill amortization and deduct real estate assets at BV from market cap, KDC is still trading at expensive recurring PER of 47x in 2017F and 34x in 2018F.
Tags: KDC

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