- We attended STK’s 2023 AGM in HCMC. We reiterate our BUY rating on STK despite cutting our target price (TP) for STK by 6%. 

- We reduce our aggregate 2023F-2025F NPAT by 17% mainly due our to lower sales volume projections. We also increase our WACC assumption from 11.9% to 12.1% due to our higher cost of debt assumption. These factors are partly offset by rolling our TP from end-2023 to mid-2024.

- In Q1 2023, STK’s revenue slumped 58% YoY while its NPAT was minimal, per management’s estimate. These results indicate further destocking from brand customers and are worse than we expected.

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