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GDA - Domestic market to support sales output

Q1/2025 results: Shifting to the domestic market saw profits recover.
• Business results declined compared to the same period in 2024 but showed recovery from the previous quarter. Specifically, net revenue and NPAT-MI were VND 3,977 billion (-3% YoY, -1% QoQ) and VND 63 billion (-34% YoY, +194% QoQ), respectively.
• Stable sales volume compared to the same period last year, reaching 197 thousand tons (-3% YoY)., GDA shifted its order allocation towards the domestic market, this achieved a domestic sales volume of 117 thousand tons (+86% YoY, +20% QoQ), securing the second-largest market share
• Gross profit margin (GPM) recovered to 7.1% (lower than the same period in 2024 but improved from 4.7% in Q4 2024), with gross profit reaching VND 282 billion (-19% YoY, +54% QoQ). This was driven not only by stable raw material and finished product prices in Q1 (HRC prices were maintained at USD 500–510 per ton) but also by the reversal of inventory provisions (~ VND 80 billion).
• From Q4 2024 to Q1 2025, the company exhibited a trend of increasing raw material stockpiling, with an average inventory turnover period exceeding 100 days and an average inventory balance of VND 4.7 trillion (a high level for the 2023–2025 period).
Q2/2025 outlook – Drivers from Domestic Market.
• For Q2 2025, revenue and NPAT-MI are projected to reach VND 4,136 billion (+4% QoQ, -31% YoY) and VND 77 billion (+23% QoQ, -55% YoY), respectively, based on conservative estimates.
• Galvanized steel consumption volume in Q2 is estimated at 206 thousand tons (+4% QoQ, -12% YoY), with the domestic market accounting for 60% of total volume, equivalent to 125 thousand tons (+27% YoY, +7% QoQ). Assuming that HRC prices remain stable at approximately USD 500/ton, the gross profit margin (GPM) is expected to hold steady at 7.2% (unchanged from Q1 2025).
• For the full year 2025, we have revised the company’s sales volume forecast down to 736 thousand tons (-14% YoY). Consequently, NPAT for 2025 is projected to reach VND 335 billion (-2% YoY), achieving 112% of the 2025 business plan.
Valuation and Recommendation
Despite facing short-term risks from the export market, GDA has successfully redirected orders to the domestic market, leveraging its competitive advantages. In the long term, Phase 1 of the new flat steel plant is expected to bolster the company’s growth. Additionally, the planned listing on the HOSE between 2025 and 2026 will enhance the company’s visibility among investors.
Using a combination of long-term (using the FCFF method) and short-term valuation methods (using the P/B comparable method), with a 50% weighting for each approach, we establish a target price for GDA at VND 33,600 per share. This corresponds to an expected return of 76%, based on the closing price on June 11, 2025. Accordingly, we recommend a BUY for GDA.