- We cut our target price for DHC by 22% as we (1) lower our aggregate 2022F-2025F NPAT by 12% and (2) incorporate a 1-ppt increase in our house equity risk premium. However, we upgrade our rating from OUTPERFORM to BUY as DHC’s share price has slumped 42% over the past three months.

- The reduction in our earnings forecasts is due to our lower price spread and sales volume assumptions as we are more conservative on demand from domestic consumption and the export sector. We forecast YoY changes in aggregate sales volume of -5% in 2022 and 2% in 2023.

- However, the short-term pressure of the low price spread is easing, which supports a rebound in operating profits. We forecast NPAT to rise 19% QoQ in Q4 2022 and 23% YoY in full-year 2023.

Powered by Froala Editor