LTG - Slow growth but potential in the near term
LTG's two main business sectors, CPC and agri-food are not expected to be potential drivers in the next five years. Regarding its core operation, CPC, the main contributor to LTG's performance, is able to maintain high gross margin but revenues will grow slowly. LTG owns high-quality rice products but needs time to penetrate the market. The restructuring process will need more time and cost to become efficient. Therefore, in the intermediate term, we expect LTG’s growth potential to be limited.
We evaluate LTG price at VND 39,500/share and anticipate a cash dividend of VND 2,000 per share in the following 12 months, which results in a 12% total return from the closing price on September 14th, 2018. We recommend to ACCUMULATE the stock.
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