- We cut our target price (TP) by 5% to VND126,000/share and downgrade our rating from OUTPERFORM to MARKET PERFORM as DGC’s share price has rallied 15% in the past two months.

- We cut our 2024F/25F/26F core EBITDA by 10%/4%/4% due to Q1 2024 lower-than-expected yellow phosphorus (P4) prices, higher phosphorus production costs, and chlor-alkali project delays.

- Our TP puts DGC’s respective 2024F/25F P/E at 15.2x/9.5x, higher than the five-year average of DGC’s TTM P/E of 9.1x. We believe that DGC deserves a higher-than-average valuation during its earnings recovery, coupled with 2025F NPAT-MI growth of 60% YoY due to new projects’ contributions, including NPAT of (1) VND200bn (USD8mn) from the new ethanol factory, (3) VND50bn (USD2mn) from the chlor-alkali project, and (4) VND329bn (USD13mn) from a one-off property project.

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