Company Insight

Hoa Phat Group Joint Stock Company (HPG) is one of the leading steel companies in Vietnam, holding the largest market share in construction steel (38%) and steel pipes (27%). We value HPG shares at VND 37,400, corresponding to a 36% return, using the P/E and DCF valuation methods with weights of 50% and 50%, respectively. We expect HPG to continue to be the leading company based on the recovery of the steel industry in 2025.

Q3/2024 business results update: HPG achieved revenue of VND 34,300 billion (-13.2% QoQ, +19% YoY), and net profit of VND 3,021 billion (-10% QoQ, +51% YoY). Production and consumption output decreased slightly compared to Q2/2024 due to seasonal factors, but still maintained positive growth YoY. Specifically, in Q3/2024, construction steel output reached 1.1 million tons (+19% YoY, -14% QoQ), steel pipes reached 185 thousand tons (+14% YoY, -1% QoQ). GMP in Q3 reached 13.9%, up from 13.2% in Q2/2024 thanks to: (1) Input prices decreased faster than output prices (Iron ore and coke decreased by 11% and 13% QoQ respectively while steel prices decreased by 3% QoQ), (2) Agriculture segment was favorable thanks to stable pork prices and increased output (Revenue increased by 21% YoY, after-tax profit increased by 80% YoY). By the end of Q3/2024, HPG achieved total revenue of VND 105,329 billion (+24% YoY) and after-tax profit of VND 9,210 billion (+140% YoY), completing 92% of the annual profit plan.