UPDATE: Credit Suisse Lowers PT on Country Style Cooking to $18.80

Credit Suisse is out with its report today on Country Style Cooking CCSC, lowering its PT to $18.80. In a note to clients, Credit Suisse writes, "We lower our adjusted GAAP NP (ex. FX loss) by 7-10%, due to: 1) lower sales assumption; 2) higher tax rate with no confirmations whether CSC would receive renewed preferential tax rates; and 3) higher SBC guidance due to the hiring of President Mr Caimin Zhong. Costs for the restaurant industry are likely to stay high, given the wage inflation environment in China. We expect wages as a percentage of sales (excluding SBC) to stay high at 17-18% and rentals at ~9%. But with strong store openings, we continue to forecast a non-GAAP earnings CAGR of 39% over 2010-13. However, with valuation at 35x and 24x 2011E and 2012E P/E, respectively, we maintain our NEUTRAL rating, as we see limited upside above market returns. We lower our target price to US$18.8, implying 0.85x PEG, at a discount to industry peers (1x PEG) due to its short track record." At the time of posting, shares of CCSC were trading at $14.99, down 10.45% from Wednesday's close.