DHC update BUY

We cut our target price by 41% to VND 63,571 per share, implying 105% TSR. Our valuation is based on a weighted approach of FCFF (50%) and PER comps (50%). Key risks include the fluctuation in OCC price might impact DHC profit margin.

Margin calls are driving the selloff, not DHC’s underlying operations. We see this as a tremendous opportunity for investors who can stomach further potential short-term volatility. The shares now trade at just 4.6x our revised 2023 PER, with a forecast cash dividend yield of 10.9%.

20221117 DHC update-edited (003)