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%). For the full year 2024, HPG recorded total revenue of VND 138,855 billion (+17% YoY) and net profit after tax (NPAT) of VND 12,020 billion (+77% YoY), achieving its revenue target and exceeding its profit target by 20%. In 2025, we expect Hoa Phat's steel consumption volume to reach 10.6 million tons (+30% YoY), driven by: (1) The commissioning of Dung Quat 2 and the anticipated issuance of anti-dumping tariffs on HRC; (2) The recovery of the domestic real estate market; (3) Increased public investment. Additionally, the upward trend in steel prices and a slight decrease in raw material costs will contribute to improving profit margins. As a result, Hoa Phat's gross profit margin (GPM) could reach 14.4% in 2025. However, we assess that pressure from Chinese steel supply and U.S. tariff policies are two key risks that could impact steel prices. Using the P/E and DCF valuation methods with equal weights of 50% each, we update our valuation for HPG stock at VND 34,300 per share, corresponding to a potential return of 29%.