DHC [BUY +23.8%] - Earnings to take off on new capacity - Initiation
  • 2020-01-20T13:34:13
  • Company Research
We initiate on DHC with a BUY rating and a projected total stock return of 23.8%. DHC is a medium-sized packaging paper company with a market share of ~2% in 2018, per our estimate. DHC is well-positioned to capture paper consumption growth in Vietnam (12% CAGR over 2019F-2022F, per our estimate) thanks to its recent 4.5x capacity expansion. Compared to other packaging paper mills invested/to be invested in Vietnam during 2017-2020, DHC’s new factory (Giao Long 2) boasts lower investment cost