Company Insight

Hoa Phat Group Joint Stock Company (HPG) is one of Vietnam’s leading steelmakers. In Q1 2026, HPG reported strong operating results, achieving 25% of its full-year revenue target and 41% of its full-year profit target. In H2 2026, the company is expected to continue benefiting from the recovery in domestic steel demand, supported by a meaningful contribution from the Dung Quat 2 complex. Based on a blend of P/E and DCF valuation methodologies, we update our target price for HPG shares to VND 34,500.

In Q1 2026, HPG posted net revenue of VND 52.9 trillion (+12.7% QoQ, +40.5% YoY) and NPATMI of VND 9.1 trillion (+132% QoQ, +170.3% YoY). HRC remained the key growth driver, with volume rising 48% YoY to 1.5 million tonnes on additional capacity from Dung Quat 2. Construction steel sales increased 20% YoY to 1.4 million tonnes amid recovering domestic construction activity, while steel pipe and galvanized steel volumes grew 18% YoY and 19% YoY to 241 thousand tonnes and 106 thousand tonnes, respectively. Gross margin expanded to 15.8% (+1.4 ppts YoY) as steel prices recovered faster than input costs. HPG also recorded a VND 4.9 trillion one-off gain from the divestment of its entire stake in the Pho Noi–Hung Yen urban development project.

We maintain our 2026 sales volume forecast of 13.3 million tonnes (+20.8% YoY), driven by stronger construction steel demand from the recovery in residential and infrastructure construction, and higher HRC sales from the Dung Quat 2 complex, which we expect to operate at 65% capacity. Anti-dumping duties on Chinese HRC should continue supporting domestic HRC demand. While coking coal prices rose 37% YTD as of April 2026 due to the Middle East conflict, we expect them to normalize and average USD 150/tonne (+30% YoY) for the year, supported by ample Australian supply. Meanwhile, iron ore prices are expected to decline slightly as China's steel output cuts reduce demand. Combined with a recovery in domestic steel prices, we forecast gross profit margin to improve to 16.0% in 2026 (+0.3 ppts YoY).