Consun’s FY18 adj. NP beat our forecast by 2% thanks to a lower selling expense ratio, despite 2% miss on the revenue. Co. maintained its dividend policy and declared 32% pay-out ratio
Legacy Consun sales continued to deliver 15% growth in FY18 while legacy Yulin sales slowed to 3% in 2H18 on growing competition in retail pharmacy
We cut our 2019/20E earnings by 2%/3% on weaker Yulin outlook, and cut TP to HK$9.5 as we rolled forward the valuation to end FY19E with lower multiples. Maintain BUY on inexpensive valuation （9x/7x FY19E/20E PER） and high FY19E div yld （4%）