Analyst Pin-board HSG – Dim export outlook in Q4
|
· Weak exports and rises of input prices impaired the Q2 bottom line. Revenues jumped 17% YoY to VND 12,661 billion but NPAT-MI tumbled 77% YoY to VND 234 billion. · After 1H/FY2021-2022, HSG completed 64% of its revenue plan and 58%/35% of its worst/best cases for PAT. · Q3 exports will benefit from high demand from overseas. The HRC price gap between Vietnam and Western markets expanded in March implying a better export gross profit margin. The situation will reverse in Q4 with domestic sales recovery compensating for dim exports. · For FY2021-2022, we project total selling volume to fall 8.7% to 2,074 thousand tons, compared with an 8% increase in the previous forecast. Average HRC price will surge 37%, higher than the increase of 25% in ASP. Thus, the gross profit margin could reach 12.4%, lower than 18.1% of FY2020-2021 and 16.2% of the previous forecast. Revenue and PAT are expected to come at VND 55,816 billion (+14.5% YoY) and VND 1,527 billion (-64% YoY). · The stock price has dropped strongly and HSG is now trading at a low TTM PER of 3.1x. However, as this year profit will be a steep fall compared to the peak of last year, PER forward for FY2021-2022 is 7.7x, which is approximate the three-year average PER of 7.6x. Thus, the stock seems unattractive at the current pricing. We recommend to OBSERVE this stock as we think profit will rebound next year, when pressures of inflation ease globally. |
Hoa Sen Group is a Vietnam-based company primarily engaged in the steel industry. It manufactures galvanized steel products, color coated steel products, cold rolled steel coils, steel tubes and other steel products. It is also involved in the manufacture of plastic pipes and fittings, as well as plastic roofing sheets. In addition, the Company trades construction fixtures; operates hotels, restaurants and retail complexes; constructs civil and industrial structures, and provides logistics services.
Viet Dragon Securities belongs to top 20 biggest securities companies in terms of chartered capital in Vietnam. With a qualified, dedicated and professional team, a widespread network, advanced technology, diversified products and services, and good relationship with local and foreign institutions, we provide a wide range of services and products to our clients both individuals and institutions, both local and foreign. We commit to provide our clients with promising investment opportunities and a comprehensive and professional financial investment services.
RongViet Research reports are diversified and abundant, along with in-depth analysis and performed by experienced, highly-qualified and knowledgeable teams. With the objectives of transparency, accurate and timely manner, RongViet believes that our products would always be important sources of information for customers/investors’ investment decisions.”
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.