We downgrade VSH from M-PF to U-PF and reduce P/E-based target price by 4% to VND13,100, TSR -17.5% as severe drought is expected to result in ~12% lower output for VSH in 2016 vs. 2015. EPS is estimated to decline by 8% for 2016 and leaves VSH trading at 9% premium compared to its peers. VSH’s 2015 & 2016 earnings is still enough to pursue dividend policy of VND1,000, yield 5.8%.