Diamond Building Products (DRT.BK/DRT TB)

Diamond Building Products (DRT.BK/DRT TB): 4Q11 earnings preview: High margin

to boost earnings

While recent flooding blocked all transportation in central Thailand and resulted in sluggish

sales volume for DRT in 4Q11, a higher margin from boarding products would help it to post

good 4Q11 earnings. As a result, we are maintaining our 2011 net profit forecast of

Bt475mn. For 2012, DRT’s new NT10 line and the upcoming benefits from the

government’s corporate tax cut should help its net profit grow 22.0% YoY. Given the solid

earnings outlook and a good dividend yield of 6.0-8.0%, we rate Outperform on the

counter with a target price of Bt7.80.

 

KGI