DOL: 4Q EPS to double QoQ, expect better FY12
We expect DOL to show first ever annual profit of PRs0.81/sh for FY11E as both volumes and prices have shown encouraging trend during the year.
4Q EPS should grow by 121% QoQ to PRs0.29 on stable local prices, higher mix of local sales and the plant operating at full capacity after its overhaul in 3Q.
The recent stock market slide has corrected DOL price to its lowest since Oct-2010. The stock is currently trading at FY12E P/E of 3.7x and P/B of 0.7x, we reiterate Buy with PO of PRs11.5/sh.
Our base-case already assumes 95% operating rates to adjust for any untoward gas supply issues. However, higher than expected gas price hike remains key downside risk to our thesis.