LPN Development

LPN Development Plc (LPN) 
 
Dragged down by lower-than-expected gross margins, Q1 2012 EPS is set to disappoint the market. We expect a net profit of THB290m, 11% below consensus. With the stock having gained 28% YTD and 62% over the past one year, this could be a good time to lock in some profit. We lower FY12-14 EPS estimates by 4-6.8% and cut our target price (still based on 8.5x CY13 P/E) by 4.8%. Given the selling pressure that will come with LPN’s Q1 2012 results announcement and a less sanguine Q2 2012 outlook, we downgrade our call to Neutral from Outperform.