LTG – Earnings Update – 20180209

• In 2017, LTG saw better-than-expected revenue growth (+11.6% yoy) driven by a strong recovery in its CPC and rice segments. The company’s net profit closely matched our forecast (+24.4% yoy) since gross margins were lower than our expectations. LTG is now trading at a TTM P/E of 6.1x, a deep discount to its peers, indicating an attractive entry point.
• We expect LTG’s gross margin to expand further in 2018, as the company continues to reap the benefits from its restructuring efforts completed in 2017 both in terms of product portfolio and distribution channels

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