HPG Flash note – BUY

HOA PHAT GROUP JSC (HPG VN)

HPG held its 2026 Annual General Meeting, highlighting the following key points:

– 2026 Business plan: HPG targets revenue of VND210 tn (+33% YoY) and net profit of VND22 tn (+42% YoY), primarily driven by its core steel segment.

– Dividend policy: Proposed 2025 dividend payout of 10% in shares and 5% in cash.

– Rail steel project: The rail steel plant is expected to deliver first output in 2Q2027, with total capacity of ~700,000 tons (including 200,000 tons of rail steel). The company has begun marketing products for the Hanoi–Quang Ninh high-speed railway project, targeted for completion in 2028.

– Export strategy: Export ratio is expected to remain below 30% of total volume, reflecting elevated logistics costs and continued focus on the domestic market.

– 1Q2026 results: Estimated revenue of over VND53.5 tn (+40% YoY) and net profit exceeding VND9 tn (+170% YoY), of which ~VND5.2 tn was generated from core operations, with the remainder from asset disposal (Pho Noi project, Hung Yen).

Strategic direction:

– HPG will continue to optimize capacity utilization across existing facilities, particularly Dung Quat 2, while accelerating R&D for high value-added products such as rail steel and tire cord steel to enhance margins.

– The Phu Yen steel complex (~USD 4 bn capex) is progressing, although implementation may be flexibly adjusted amid rising FX and interest rate pressures.

– HPG is also exploring diversification into real estate, industrial parks, and renewable energy, prioritizing equity participation in large-scale projects, while maintaining disciplined leverage and avoiding incremental debt for real estate investments.

Quick comment: We maintain our 2026 forecasts, projecting revenue of VND 205.2 tn (+30% YoY) and net profit of VND 21.8 tn (+41% YoY). We reiterate a BUY recommendation, with a target price of VND 35,700 per share for 2026.